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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 30, 1998.
CASTLE CREEK PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
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DELAWARE 333-50367-02 04-3416343
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
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151 MERRIMAC STREET
BOSTON, MA 02114
(Address of Principal Executive Offices)
(617) 523-6050
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
1. Press Release Respecting Reorganization.
On June 30, 1998, Boston Celtics Limited Partnership ("BCLP") announced
the consummation of its reorganization, pursuant to which limited partnership
interests in the Registrant were distributed to BCLP unit holders who elected to
maintain their investment in BCLP through an interest in the Registrant; a copy
of BCLP's press release is attached to this Form 8-K as Exhibit 99. For further
information regarding the reorganization, see the Registrant's Registration
Statement on Form S-4 (File No. 333-50367).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
3.1 Amended and Restated Partnership Agreement of Castle Creek
Partners, L.P., dated June 29, 1998.
99.1 Text of press release, dated June 30, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: June 30, 1998
CASTLE CREEK PARTNERS, L.P.
By: Castle Creek Partners GP, Inc.,
its General Partner
By: /s/ Richard G. Pond
-------------------------------------
Name: Richard G. Pond
Title: Chief Financial Officer
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EXHIBIT INDEX
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<CAPTION> SEQUENTIALLY
EXHIBIT NO. DOCUMENT NUMBERED PAGE
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3.1 Amended and Restated Agreement of
Limited Partnership of Boston Celtics
Limited Partnership II, dated
June 29, 1998.
99.1 Press Release, dated June 30, 1998.
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CASTLE CREEK PARTNERS, L.P.
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CASTLE CREEK PARTNERS, L.P.
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS ................................................................ 1
ARTICLE II CONTINUATION; NAME; PLACE OF BUSINESS ............................................. 7
2.01 Continuation of Partnership .................................................... 7
2.02 Name of Partnership ............................................................ 8
2.03 Place of Business .............................................................. 8
2.04 Registered Office and Registered Agent ......................................... 8
ARTICLE III PURPOSES, NATURE OF BUSINESS AND POWERS OF PARTNERSHIP ........................... 8
3.01 Purposes and Business .......................................................... 8
3.02 Powers ......................................................................... 9
ARTICLE IV TERM OF PARTNERSHIP ............................................................... 9
4.01 Term ........................................................................... 9
ARTICLE V CAPITAL ............................................................................ 9
5.01 Capital Contribution of General Partner ........................................ 9
5.02 Capital Contributions of Limited Partners ...................................... 9
5.03 Additional Capital Contributions ............................................... 10
5.04 Additional Issuances of Securities; Additional Classes of Units ................ 10
5.05 No Preemptive Rights ........................................................... 12
5.06 No Fractional Units ............................................................ 12
5.07 Splits and Combinations ........................................................ 12
5.08 Capital Accounts ............................................................... 14
5.09 No Interest on Amounts in Capital Account ...................................... 15
5.10 Advances to Partnership ........................................................ 15
5.11 Liability of Limited Partners .................................................. 15
5.12 Return of Capital .............................................................. 15
ARTICLE VI ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS ................................... 15
6.01 General Allocations of Net Profits and Net Losses .............................. 15
6.02 Overriding Allocations of Net Profits and Net Losses ........................... 16
6.03 Distributions .................................................................. 17
6.04 Allocations and Distributions With Respect to Interests Transferred or Upon
Admittance ................................................................... 18
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ARTICLE VII MANAGEMENT ....................................................................... 18
7.01 Management and Control of Partnership .......................................... 18
7.02 Powers of General Partners ..................................................... 19
7.03 Restrictions on Authority of General Partner ................................... 24
7.04 Title to Partnership Assets .................................................... 24
7.05 Reserves ....................................................................... 24
7.06 Other Business Activities of Partners .......................................... 25
7.07 Transactions with General Partners or Affiliates; Resolution of Conflicts of
Interest ..................................................................... 25
7.08 Agreements of General Partner .................................................. 26
7.09 Liability of General Partners to Partnership and Limited Partners .............. 26
7.10 Indemnification of General Partners and Affiliates ............................. 27
7.11 Indemnification Procedures ..................................................... 28
7.12 No Management or Control by Limited Partners ................................... 29
7.13 Other Matters Concerning the General Partner ................................... 29
7.14 Loans to or from the General Partner ........................................... 30
7.15 Purchase or Sale of Units ...................................................... 31
7.16 Partnership Expenses; Fees to General Partner .................................. 31
ARTICLE VIII BANK ACCOUNTS; BOOKS AND RECORDS; FISCAL YEAR STATEMENTS; TAX MATTERS ........... 32
8.01 Bank Accounts .................................................................. 32
8.02 Books and Records .............................................................. 32
8.03 Fiscal Year .................................................................... 33
8.04 Financial Statements and Information ........................................... 33
8.05 Accounting Decisions ........................................................... 34
8.06 Preparation of Tax Returns ..................................................... 34
8.07 Tax Elections .................................................................. 34
8.08 Tax Controversies .............................................................. 34
8.09 Withholding Requirements ....................................................... 34
ARTICLE IX OWNERSHIP OF UNITS ................................................................ 35
9.01 Record Holder .................................................................. 35
ARTICLE X TRANSFER OF PARTNERSHIP INTERESTS AND UNITS ........................................ 36
10.01 Transfer ...................................................................... 36
10.02 Transfer of Interest of General Partner ....................................... 36
10.03 Transfer of Units ............................................................. 37
10.04 Transferees and Substituted Limited Partners .................................. 38
ARTICLE XI ADDITIONAL GENERAL PARTNERS ....................................................... 39
11.01 Admission of an Additional or Successor General Partner ....................... 39
ARTICLE XII WITHDRAWAL OR REMOVAL OF GENERAL PARTNERS ........................................ 40
12.01 Withdrawal of General Partner ................................................. 40
12.02 Removal of General Partner .................................................... 41
12.03 Amendment of Agreement and Certificate of Limited Partnership ................. 41
12.04 Interest of Departing Partner and Successor ................................... 41
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ARTICLE XIII DISSOLUTION AND LIQUIDATION ..................................................... 42
13.01 No Dissolution ................................................................ 42
13.02 Events Causing Dissolution .................................................... 42
13.03 Right to Continue Business of Partnership ..................................... 43
13.04 Dissolution ................................................................... 43
13.05 Liquidation ................................................................... 43
13.06 Reasonable Time for Winding Up ................................................ 44
13.07 Termination of Partnership .................................................... 44
ARTICLE XIV AMENDMENTS; MEETINGS; RECORD DATE ................................................ 45
14.01 Amendments to be Adopted Solely by the General Partner ........................ 45
14.02 Amendment Procedures .......................................................... 46
14.03 Special Amendment Requirements ................................................ 47
14.04 Meetings ...................................................................... 47
14.05 Notice of Meeting ............................................................. 48
14.06 Record Date ................................................................... 48
14.07 Adjournment ................................................................... 48
14.08 Waiver of Notice; Consent to Meeting; Approval of Minutes ..................... 48
14.09 Quorum ........................................................................ 48
14.10 Conduct of Meeting ............................................................ 49
14.11 Action Without a Meeting ...................................................... 49
ARTICLE XV POWER OF ATTORNEY ................................................................. 49
ARTICLE XVI MISCELLANEOUS PROVISIONS ......................................................... 51
16.01 Notices ....................................................................... 51
16.02 Severability .................................................................. 51
16.03 Survival ...................................................................... 52
16.04 Waivers ....................................................................... 52
16.05 Exercise of Rights ............................................................ 52
16.06 Binding Effect ................................................................ 52
16.07 Limitation on Benefits of this Agreement ...................................... 52
16.08 Consent of Limited Partners ................................................... 52
16.09 Waiver of Partition ........................................................... 52
16.10 Entire Agreement .............................................................. 53
16.11 Pronouns and Plurals .......................................................... 53
16.12 Headings ...................................................................... 53
16.13 Governing Law ................................................................. 53
16.14 Execution in Counterparts ..................................................... 53
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SCHEDULE A Limited Partners Admitted on the Effective Date
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CASTLE CREEK PARTNERS, L.P.
This Amended and Restated Agreement of Limited Partnership of Castle
Creek Partners, L.P., a Delaware limited partnership (the "Partnership"), is
made and entered into as of June __, 1998, and shall be effective as of the
Closing (as that term is defined in Section 1.6 of that certain Amended and
Restated Agreement and Plan of Reorganization dated as of June 5, 1998, and
which relates to the reorganization of Boston Celtics Limited Partnership
("BCLP")) (the "Effective Date"), by and among Castle Creek Partners GP, Inc., a
Delaware corporation having its principal place of business at 151 Merrimac
Street, Boston, Massachusetts 02114, as general partner (the "General Partner"),
BCLP, a Delaware limited partnership having its principal place of business at
151 Merrimac Street, Boston, Massachusetts 02114, as limited partner (the
"Original Limited Partner"), and all other Persons who have been admitted to the
Partnership as limited partners of the Partnership as of the Effective Date, as
listed on Schedule A hereto, and all Person who become limited partners in
accordance with the terms of this Agreement. Capitalized terms used in this
Agreement have the meanings ascribed to them in Article I below or, if not
defined in Article I, as otherwise defined herein.
In consideration of the covenants, conditions and agreements herein set
forth, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for the purposes of this Agreement, have the meanings
herein specified. Unless otherwise specified, all references herein to Articles
or Sections are to Articles or Sections of this Agreement.
Accounting Firm means the independent public accountants who are
responsible for advising the General Partner, as selected and approved by the
General Partner from time to time, in its sole discretion.
Affiliate means, when used with reference to a specified Person, (i)
any Person that directly or indirectly controls or is controlled by or is under
common control with the specified Person, (ii) any Person that is an officer of,
general partner in or trustee of, or serves in a similar capacity with respect
to, the specified Person or of which the specified Person is an officer, general
partner or trustee, or with respect to which the specified Person serves in a
similar capacity, and (iii) any Person that, directly or indirectly, is the
beneficial owner of 10% or more of any class of equity securities of the
specified Person or of which the specified Person is directly or indirectly the
owner of 10% or more of any class of equity securities. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to direct or cause
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the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
Agreement means this Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
BCLP means Boston Celtics Limited Partnership, a Delaware limited
partnership.
BCLP II means Boston Celtics Limited Partnership II, a Delaware limited
partnership.
BCLP Partnership Agreement means that certain Amended and Restated
Agreement of Limited Partnership of BCLP dated as of December 4, 1986 and as
amended to the date hereof.
Business Day means Monday through Friday of each week, except that a
legal holiday recognized as such by the Government of the United States shall
not be regarded as a Business Day.
Capital Account means the capital account established and maintained
for each Partner pursuant to Section 5.08.
Capital Contribution means the amount of money or other assets
contributed to the Partnership pursuant to Section 5.01, 5.02 or 5.03 by a
Partner.
Carrying Value means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows: (i) the initial
Carrying Value of any asset contributed (or deemed contributed) to the
Partnership shall be such asset's gross fair market value at the time of such
contribution; (ii) the Carrying Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values at the times
specified in Section 5.08(c) if the Partnership has elected to adjust the
Partners' Capital Accounts as provided in Section 5.08(c), and (iii) if the
Carrying Value of an asset has been determined pursuant to clause (i) or (ii) of
this Section 1.08, such Carrying Value shall thereafter be adjusted in the same
manner as would the asset's adjusted basis for federal income tax purposes
except that depreciation deductions shall be computed in accordance with Section
1.25(a) below.
Cause has the definition set forth in Section 12.02(a).
Certificate of Limited Partnership means the certificate of limited
partnership of the Partnership as filed in the Recording Office pursuant to the
Delaware Act, as such certificate may be amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and the
applicable regulations thereunder. Any reference herein to a specific section of
the Code or any regulation thereunder shall be deemed to include a reference to
the corresponding provision of any amendment thereto, any regulation thereunder
or any successor statute or regulation.
Commission means the U.S. Securities and Exchange Commission.
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Delaware Act means the Delaware Revised Uniform Limited Partnership Act
(6 Del. C. Sections 17-101 et seq.), as it may be amended from time to time, and
any successor to such Act.
Departing Partner means the Person who has been removed or who has
withdrawn as a General Partner pursuant to Article XII, from and after the
effective date of the removal or withdrawal of such Person as General Partner.
Effective Date means the date of Closing as defined in the
Reorganization Agreement.
Excess Negative Balance means the excess, if any, of (a) the negative
balance in a Partner's Capital Account after reducing such balance by the net
adjustments, allocations and distributions described in Treasury Regulation
Section 1.704-l(b)(2)(ii)(d)(4),(5) and (6) which, as of the end of the
Partnership's taxable year are reasonably expected to be made to such Partner,
over (b) the sum of (i) the amount, if any, which the Partner is required to
restore to the Partnership upon liquidation of the Partner's interest in the
Partnership (or which is so treated pursuant to Treasury Regulation Section
1.704-l(b)(2)(ii)(c)), (ii) the Partner's share (as determined under Temporary
Treasury Regulation Section l.704-1T(b)(4)(iv)(f)) of the Partnership's Minimum
Gain computed solely with respect to Nonrecourse Debt other than Partner
Nonrecourse Debt, (iii) the Partner's share (as determined under Temporary
Treasury Regulation Section l.704-lT(b)(4)(iv)(h)(5)) of the Partnership's
Minimum Gain computed solely with respect to any Partner Nonrecourse Debt for
which the Partner bears the economic risk of loss and (iv) the Partner's share
(as determined under Code Section 752) of any recourse indebtedness of the
Partnership to the extent that such indebtedness could not be repaid out of the
Partnership's assets if all of the Partnership's assets were sold at their
respective Carrying Values as of the end of the fiscal year or other period and
the proceeds from the sales were used to pay the Partnership's liabilities. For
purposes of clause (iv) of this Section 1.15, the amounts computed pursuant to
clause (i) of this Section 1.15 for each Partner shall be considered to be
proceeds from the sale of the assets of the Partnership to the extent such
amounts would be available to satisfy (directly or indirectly) the indebtedness
specified in clause (iv).
Exchange Act means the Securities Exchange Act of 1934, as amended, the
regulations of the Commission promulgated thereunder, and any successor to any
of them.
Fiscal Year means the fiscal year of the Partnership for financial
accounting purposes, and for federal, state and local income tax purposes, which
shall end on December 31 in each year unless changed by the General Partner in
accordance with Section 8.03.
General Partner means Castle Creek Partners GP, Inc., or any transferee
pursuant to Section 10.02 hereof and admitted to the Partnership in accordance
with Section 11.01 or any successor appointed pursuant to Section 11.01
following the removal of a General Partner pursuant to Section 12.02. "General
Partners" means the General Partner and any additional or substituted General
Partners admitted to the Partnership in accordance with Section 11.01.
Indemnitee has the meaning set forth in Section 7.10.
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Limited Partners means any Persons admitted as limited partners of the
Partnership pursuant to the terms of this Agreement, including Substituted
Limited Partners, each for so long as such Person remains as a Limited Partner
hereunder.
Liquidating Trustee means the General Partner, unless the dissolution
of the Partnership is caused by withdrawal, bankruptcy, removal or dissolution
of the General Partner, in which event the Liquidating Trustee shall be the
Person or Persons selected pursuant to Section 13.05.
Majority Vote of the Limited Partners means the written consent of, or
an affirmative vote in accordance with Section 14.04 by, Limited Partners who
are Record Holders with respect to more than fifty percent (50%) of the
outstanding Units held of record by Limited Partners on the Record Date
established by the General Partner for such consent or vote.
Market means an established securities market or secondary market or
the substantial equivalent thereof (as such terms are used in Code section 7704
and regulations thereunder).
Minimum Gain means the amount determined by computing, with respect to
each Nonrecourse Debt of the Partnership, the amount of Net Profit that would be
realized by the Partnership if it disposed of the assets securing such debt in
full satisfaction thereof, and by then aggregating the amounts so computed. For
purposes of determining the amount of such Net Profit with respect to a debt,
the Carrying Value of the asset securing the debt shall be allocated among all
the debt that the asset secures in the manner set forth in Temporary Treasury
Regulation Section 1.704-lT(b)(4)(iv)(c) and Temporary Treasury Regulation
Section l.704-lT(b)(4)(iv)(h)(6) (or successor provisions).
Net Profits and Net Losses means the taxable income or loss, as the
case may be, for a period (or from a transaction) as determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss, or
deduction required to be separately stated pursuant to Code Section 703(a)(l)
shall be included in taxable income or loss) computed with the following
adjustments: (a) items of gain, loss, and deduction shall be computed based upon
the Carrying Values of the Partnership's assets rather than upon the assets'
adjusted bases for federal income tax purposes, and, in particular, the amount
of any deductions for depreciation or amortization with respect to an asset for
a period shall equal such asset's Carrying Value multiplied by a fraction the
numerator of which shall be the amount of depreciation or amortization with
respect to such asset allowable for federal income tax purposes for such period
and the denominator of which shall be such asset's adjusted basis; (b) any
tax-exempt income received by the Partnership shall be included as an item of
gross income; (c) the amount of any adjustments to Carrying Values of any assets
of the Partnership pursuant to Code Section 743 shall not be taken into account;
and (d) any expenditure of the Partnership described in Code Section
705(a)(2)(B) (including any expenditures treated as being described in Section
705(a)(2)(B) pursuant to Treasury Regulations under Code Section 704(b)) shall
be treated as a deductible expense.
Nonrecourse Debt means any liability of the Partnership that either (a)
is treated as nonrecourse for purposes of Treasury Regulation Section 1.1001-2
or (b) with respect to which the creditor's right to repayment is limited to one
or more of the assets of the Partnership.
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Opinion of Counsel means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner) acceptable to the
General Partner.
Original Agreement means the Agreement of Limited Partnership of Castle
Creek Partners, L.P. entered into on April 13, 1998.
Original Limited Partner means BCLP.
Partner means a General Partner or a Limited Partner. "Partners" means
the General Partners and all Limited Partners.
Partner Nonrecourse Debt means any Nonrecourse Debt of the Partnership
with respect to which a Partner or an affiliate of a Partner bears the economic
risk of loss within the meaning of Temporary Treasury Regulation
1.704-1T(b)(4)(iv)(k)(l).
Partnership means the limited partnership heretofore formed pursuant to
the Original Agreement and continued pursuant to this Agreement and the Delaware
Act.
Partnership Assets means all assets and property, whether tangible or
intangible and whether real, personal or mixed, at any particular time owned by
the Partnership, including without limitation limited partnership interests in
Celtics Basketball Holdings, L.P.
Partnership Interest means, as to any Partner, all of the interests of
that Partner in the Partnership, including without limitation such Partner's (i)
right to a distributive share of the profits and losses of the Partnership, (ii)
right to a distributive share of cash and other Partnership Assets, (iii) right,
if a General Partner, to participate in the management and control of the
business and affairs of the Partnership, and (iv) right to vote on certain
matters as set forth herein.
Percentage Interests means the Partners' respective percentage
interests in the Partnership, as follows:
General Partner -- one percent (1%).
Limited Partners as a class -- ninety-nine percent (99%).
The Percentage Interest of each Limited Partner is equal to (i)
ninety-nine percent (99%) multiplied by (ii) a fraction, the numerator of which
is the number of Units held by such Limited Partner as of the date of such
determination and the denominator of which is the total number of Units
outstanding as of the date of such determination; provided, however, that
following any issuance of additional Units by the Partnership pursuant to
Section 5.04 having special rights or obligations, proper adjustment shall be
made by the General Partner to the Percentage Interest represented by each Unit
to reflect such issuance.
Person means any individual, corporation, association, partnership,
joint venture, trust, estate or other entity or organization.
Proceeding has the meaning set forth in Section 7.11(a).
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Record Date means the date established by the General Partner, in its
sole discretion, for determining (a) the identity of Limited Partners entitled
to notice of, or to vote at, any meeting of Limited Partners or entitled to vote
by ballot or give approval of Partnership action in writing without a meeting or
entitled to exercise rights in respect of any other lawful action of Limited
Partners or (b) the identity of Partners entitled to receive any report or
distribution.
Record Holder(s) means the Persons shown as Limited Partners on the
records of the Partnership or the Transfer Agent as of the close of business on
a particular day.
Recording Office means the office designated by the Secretary of State
of the State of Delaware for the filing of certificates of limited partnership
in accordance with the Delaware Act.
Registration Statement means the Registration Statement on Form S-4
(Registration No. 333-50367), as amended, filed by the Partnership, BCLP II and
BCLP with respect to certain securities to be issued pursuant to the
Reorganization Agreement.
Reorganization means the reorganization of BCLP pursuant to the
Reorganization Agreement.
Reorganization Agreement means the Amended and Restated Plan and
Agreement of Reorganization dated as of June 5, 1998 by and among BCLP, BCLP II,
the Partnership, Celtics Limited Partnership, Celtics Capital Corporation,
Celtics, Inc., BCLP II GP, Inc., the General Partner and Boston Celtics
Corporation, as it may be amended from time to time.
Reserves has the definition set forth in Section 7.05.
Revenues means the gross revenues of the Partnership for financial
accounting purposes as determined in accordance with generally accepted
accounting principles for the period for which such determination is being made.
Sale means, with respect to any Partnership Assets, any sale, exchange,
assignment or other disposition thereof, excluding any contribution or
assignment of Partnership Assets to a partnership in which the Partnership holds
at least a 99% general and/or limited partnership interest.
Securities Act means the Securities Act of 1933, as amended, the
regulations of the Commission promulgated thereunder, and any successor to any
of them.
Substituted Limited Partner means a Person who is admitted to the
Partnership as a Limited Partner pursuant to Section 10.04.
Super-Majority Vote of the Limited Partners means the written consent
of, or an affirmative vote in accordance with Section 14.04 by, Limited Partners
who are Record Holders with respect to at least eighty percent of the
outstanding Units held of record by Limited Partners on the Record Date
established by the General Partner for such consent or vote.
Termination Date means December 31, 2098.
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Transfer Agent means the bank, trust company or other Person (including
the Partnership or the General Partner or any of its Affiliates) which may be
appointed by the General Partner from time to time, in its sole discretion, to
act as the registrar and transfer agent for the Units.
Transfer Application means an application and agreement, subject to the
approval of the General Partner, for transfer of Units pursuant to which the
transferor certifies the number of Units owned by the transferor as of the date
of such Transfer Application and the number of Units which the transferor
proposes to transfer to the proposed transferee, and the proposed transferee
provides certain information to the Partnership and (a) requests the transfer of
record of one or more Units to him, (b) requests admission as a Limited Partner
with respect to such Units, (c) agrees to be bound by the terms and conditions
of this Agreement, (d) grants powers of attorney to the General Partner as
provided for in this Agreement, and (e) makes the consents and waivers set forth
herein.
Unit means a unit representing a Partnership Interest of a Limited
Partner and representing a pro rata percentage interest in the aggregate
Percentage Interest of the Limited Partners (unless any class or series of Units
issued pursuant to Section 5.04 shall have designations, preferences or special
rights such that a Unit of such class or series shall represent a greater or
lesser part of the Partnership Interest of all Limited Partners than a Unit of
any other class or series of Units, in which event the Partnership Interest
represented by a Unit of such class or series shall be determined in accordance
with such designations, preferences and special rights as are fixed by the
general partner pursuant to Section 5.04 with respect to such class or series of
Units). Except as may otherwise be specifically provided by the General Partner
in connection with the issuance of additional Units pursuant to Section 5.04,
all Units shall constitute a single class or group for purposes of voting or the
giving of written consents hereunder and for all other purposes hereof or of the
Delaware Act, and each Unit shall be entitled to one vote.
ARTICLE II
CONTINUATION; NAME; PLACE OF BUSINESS
2.01 Continuation of Partnership. The General Partner and the Limited
Partners hereby agree to continue, in accordance with the terms and conditions
hereof, the Partnership as a limited partnership pursuant to the provisions of
the Delaware Act. If the laws of any jurisdiction in which the Partnership
transacts business so require, the General Partner also shall file with the
appropriate office in that jurisdiction any documents necessary for the
Partnership to qualify to transact business in such jurisdiction and shall use
all reasonable efforts to file with the appropriate office in that jurisdiction
any documents necessary to establish and maintain the Limited Partners' limited
liability in such jurisdiction. The Partners agree and obligate themselves to
execute, acknowledge and cause to be filed of record, in the place or places and
manner prescribed by law, any amendments to the Certificate of Limited
partnership as may be required, either by the Delaware Act, by the laws of a
jurisdiction in which the Partnership transacts business, or by this Agreement,
to reflect changes in the information contained therein or otherwise to comply
with the requirements of law for the continuation, preservation and operation of
the Partnership as a limited partnership under the Delaware Act.
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2.02 Name of Partnership. The name of the Partnership shall be "Castle
Creek Partners, L.P." or such other name as the General Partner may from time to
time determine. The business of the Partnership may be conducted under any other
name deemed necessary or desirable by the General Partner, in its sole
discretion, in compliance with applicable law. The General Partner (and, if
necessary, any other Partner) promptly shall execute, file and record any
assumed or fictitious name certificates required by the laws of Delaware or any
other state in which the Partnership transacts business, and shall publish such
certificates or other statements or certificates as are required by the laws of
Delaware or any other state in which the Partnership transacts business.
2.03 Place of Business. The principal place of business of the
partnership, and the business address of the General Partner, initially shall be
located at 151 Merrimac Street, Boston, Massachusetts 02114. The General Partner
may hereafter change the principal place of business of the Partnership to such
other place or places within the United States as the General Partner may
determine from time to time, in its sole discretion, provided that the General
Partner shall give written notice thereof to the Limited Partners at the time of
the next regular mailing to the Limited Partners and, in connection therewith,
shall, if necessary, amend the Certificate of Limited Partnership in accordance
with the applicable requirements of the Delaware Act. The General Partner may,
in its sole discretion, establish and maintain such other offices and additional
places of business of the Partnership, either within or without the State of
Delaware, as it deems appropriate.
2.04 Registered Office and Registered Agent. The street address of the
registered office of the Partnership in Delaware shall be c/o National Corporate
Research, Ltd., 9 East Loockerman Street, Dover, Delaware 19901, and the
Partnership's registered agent at such address shall be National Registered
Agents, Inc. Such registered office and registered agent may be changed at the
direction of the General Partner, in its sole discretion.
ARTICLE III
PURPOSES, NATURE OF BUSINESS AND POWERS OF PARTNERSHIP
3.01 Purposes and Business. The purpose and business of the Partnership
shall include, without limitation:
(a) to hold the Partnership Assets, and receive, hold or distribute any
proceeds generated by the income from, or sale of, those assets; to acquire
additional Partnership Assets, including shares of stock or other interests
(including without limitation controlling interests) in operating businesses;
and to engage in any activities incidental or related to the foregoing
activities; and
(b) to engage in any lawful act or activity in which limited
partnerships may engage under the Delaware Act.
3.02 Powers. In furtherance of the purposes of the Partnership, the
Partnership shall have and may exercise any and all powers conferred by the laws
of Delaware on limited
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partnerships formed under the laws pursuant to and under which this Partnership
is formed, as such laws are now in effect or at any time hereafter are put into
effect, including all powers that may be exercised by the General Partner on
behalf of the Partnership pursuant to this Agreement.
ARTICLE IV
TERM OF PARTNERSHIP
4.01 Term. The Partnership commenced on the date upon which the
Certificate of Limited Partnership was duly filed with the Recording Office and
shall continue until the Termination Date unless dissolved and liquidated before
the Termination Date in accordance with the provisions of Article XIII.
ARTICLE V
CAPITAL
5.01 Capital Contribution of General Partner. Concurrently with the
execution of the Original Agreement, the General Partner made a Capital
Contribution in the amount of Ten Dollars ($10.00) in cash. On or prior to the
Effective Date, the General Partner shall make such further Capital
Contributions to the Partnership as are provided for pursuant to the terms of
the Reorganization Agreement.
5.02 Capital Contributions of Limited Partners.
(a) Concurrently with the execution of the Original Agreement, the
Original Limited Partner made a Capital Contribution in the amount of Nine
Hundred Ninety Dollars ($990.00) in cash. On or prior to the Effective Date, the
Original Limited Partner shall make such further Capital Contributions to the
Partnership as are provided for pursuant to the terms of the Reorganization
Agreement and shall be issued in respect of such Capital Contributions such
number of Units as equals the number of Units required to be distributed to all
Eligible Unitholders (as defined in the Reorganization Agreement) who have made
a proper election to receive Units of Limited Partnership Interest in the
Partnership with respect to BCLP Units (as defined in the Reorganization
Agreement) owned by such Eligible Unitholders pursuant to the terms of the
Reorganization Agreement ("Castle Creek Electing Unitholders").
(b) On the Effective Date, the Original Limited Partner shall
distribute the Units received by it pursuant to Section 5.02(a) to the Castle
Creek Electing Unitholders in accordance with the terms of the Reorganization
Agreement. Each such Castle Creek Electing Unitholder shall thereupon be deemed
admitted as a Limited Partner of the Partnership with respect to each of the
Units so received. Concurrently with the admission of Castle Creek Electing
Unitholders as Limited Partners of the Partnership pursuant to this Section
5.02(b), the Original Limited Partner will withdraw from the Partnership and the
Partnership will return to the Original Limited Partner its original $990
Capital Contribution.
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(c) On or prior to the Effective Date, Boston Celtics Corporation will
make a Capital Contribution to the Partnership consisting of the property
identified in the Reorganization Agreement and, at the time of such
contribution, shall be deemed admitted as a Limited Partner of the Partnership
and shall receive such number of Units of Limited Partnership Interest in the
Partnership as are determined pursuant to the Reorganization Agreement.
5.03 Additional Capital Contributions.
(a) No General Partner shall be required to make any Capital
Contribution or advance to the Partnership except as specifically set forth in
Section 5.01 even if the failure to do so would result in a consequence
materially adverse to the Partnership.
(b) No Limited Partner who is not also a General Partner and who does
not participate in the control of the business of the Partnership shall have any
personal liability whatsoever, whether to the Partnership, to any of the
partners or to the creditors of the Partnership, for the debts of the
Partnership or for any of its losses beyond
(i) the amount of his Capital Contribution, and
(ii) to the extent and for the period required by applicable law,
the amount of any distribution made by the Partnership to him.
Each Unit, upon the issuance thereof, shall be validly issued, fully paid and
not subject to assessment for additional Capital Contributions. No Limited
Partner shall be required to lend any funds to the Partnership or, after his
Capital Contribution has been paid, to make any further contribution to the
capital of the Partnership.
5.04 Additional Issuances of Securities; Additional Classes of Units.
(a) In order to raise additional capital, to acquire assets, to redeem
or retire Partnership debt, or for any other Partnership purpose, the General
Partner is authorized to cause the Partnership to issue Units, Partnership
Interests or classes or series thereof in addition to those issued pursuant to
Section 5.02 from time to time to Partners or to other Persons and to admit them
to the Partnership as Limited Partners, all without the approval of the Partners
or any other Persons who may acquire an interest in Units or Partnership
Interests. The General Partner is also authorized to cause the issuance of any
Unit, Partnership Interest or other type of security of the Partnership from
time to time to Partners or Unitholders or other Persons on terms and conditions
established in the sole and complete discretion of the General Partner, all
without the approval of the Limited Partners or any other Persons who may
acquire an interest in Units or Partnership Interests. Such securities may
include, without limitation, unsecured and secured debt obligations of the
Partnership, debt obligations of the Partnership convertible into any class or
series of Units or Partnership Interests that may be issued by the Partnership,
options, rights or warrants to purchase any such class or series of Units or
Partnership Interests or any combination of any of the foregoing. There shall be
no limit on the number of Units, Partnership Interests or other securities that
may be so issued, and the General Partner shall have sole and complete
discretion in determining the consideration and terms and conditions with
respect to any future issuance of
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Units, Partnership Interests or other securities. The General Partner shall do
all things necessary to comply with the Delaware Act and is authorized and
directed to do all things it deems to be necessary or advisable in connection
with any such future issuance, including without limitation, compliance with any
statute, rule, regulation or guideline of any federal, state or other
governmental agency. The Partnership may assume liabilities and hypothecate its
property in connection with any such issuance.
(b) Units and Partnership Interests to be issued by the Partnership
shall be issuable from time to time in one or more classes or series, at such
price, and with such designations, preferences and relative participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to existing classes or series of Units and Partnership
Interests, all as shall be fixed by the General Partner in the exercise of its
sole and complete discretion, including without limitation: (i) the allocation,
for federal income and other tax purposes, to such class or series of Units and
Partnership Interests of items of Partnership income, gain, loss, deduction and
credit; (ii) the rights of such class or series of Units and Partnership
Interests to share in Partnership distributions; (iii) the rights of such class
or series of Units and Partnership Interests on dissolution and liquidation of
the Partnership; (iv) whether such class or series of Units and Partnership
Interests are redeemable by the Partnership and, if so, the price at which, and
the terms and conditions on which, such class or series of Units and Partnership
Interests may be so redeemed; (v) whether such class or series of Units and
Partnership Interests is issued with the right of conversion and, if so, the
rate at and the terms and conditions upon which such class or series of Units
and Partnership Interests may be converted into any other class or series of
Units and/or Partnership Interests; (vi) the terms and conditions of the
issuance of such class or series of Units and Partnership Interests, and all
other matters relating to the assignment thereof; and (vii) the rights of such
class or series of Units and Partnership Interests to vote on matters relating
to the Partnership and this Agreement.
(c) Upon or prior to the issuance of any class or series of Units,
Partnership Interests or other securities which shall not be identical to the
Units issued pursuant to Section 5.02, the General Partner, without the consent
at the time of any Limited Partner (each Limited Partner hereby consenting to
any and each such amendment), may amend any provision of this Agreement and,
exercising the power of attorney granted to the General Partner pursuant to
Article XV, may execute, swear to, acknowledge, deliver, file and record, if
required, such documents as the General Partner may determine to be necessary or
appropriate in connection therewith in order to reflect the authorization and
issuance of each such class or series of Units, Partnership Interests or other
securities and the designations, preferences and relative, participating,
optional or other special rights thereof.
(d) The General Partner shall do all things it deems to be appropriate
or necessary to comply with the Delaware Act and is authorized and directed to
do all things it deems to be necessary or advisable in connection with any such
future issuance, including compliance with any statute, rule, regulation or
guideline of any federal, state other governmental agency, or any other
regulatory body which shall or may have jurisdiction over such securities or the
issuance, sale or transfer thereof.
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5.05 No Preemptive Rights. Except as provided by the General Partner in
connection with the issuance of additional Units, Partnership Interests or other
securities under Section 5.04, no Partner shall have any preemptive,
preferential or other similar right with respect to (a) additional Capital
Contributions; (b) issuance or sale of Units or other Partnership Interests,
whether unissued or held in the treasury; (c) issuance of any obligations,
evidences of indebtedness or other securities of the Partnership whether or not
convertible into or exchangeable for or carrying or accompanied by any rights to
receive, purchase or subscribe to, any unissued Units or other Partnership
Interests or any Units held in the treasury; (d) issuance of any right of,
subscription to or right to receive, or any warrant or option for the purchase
of, any of the foregoing securities; or (e) issuance or sale of any other
securities that may be issued or sold by the Partnership.
5.06 No Fractional Units. No fractional Units may be issued by the
Partnership or assigned by Partners except as provided in Section 5.07.
5.07 Splits and Combinations.
(a) The General Partner may, in its sole discretion, cause the
Partnership to make a distribution in Units (or any other instrument evidencing
ownership or assignment of Partnership Interests) to all Record Holders or may
effect a subdivision or combination of Units (or any other instrument evidencing
ownership or assignment of Partnership Interests) but in each case only on a pro
rata basis so that, after such distribution, subdivision or combination, each
Partner and Unitholder shall, subject to Section 5.07(e), have substantially the
same Percentage Interest in the Partnership as before such distribution,
subdivision or combination. The Partnership may, but shall not be required to,
issue fractional Units (or any other instrument evidencing ownership or
assignment of Partnership Interests) upon any such distribution, subdivision or
combination of Units (or any other instrument evidencing ownership or assignment
of Partnership Interests). In the event any distribution, subdivision or
combination of Units (or any other instrument evidencing ownership or assignment
of Partnership Interests) would result in the issuance of fractional Units (or
other instrument evidencing ownership or assignment of Partnership Interests)
but for the provisions of this Section 5.07(a), in the sole discretion of the
General Partner, the final fraction of a Unit (or other instrument evidencing
ownership or assignment of Partnership Interests) issuable to each record holder
may be rounded to the nearest whole Unit (or other instrument evidencing
ownership or assignment of Partnership Interests).
(b) Whenever such distribution, subdivision or combination is declared,
the General Partner shall select a Record Date as of which the distribution,
subdivision or combination shall be effective and shall send notice of the
distribution, subdivision or combination at least twenty (20) days prior to such
Record Date to each Record Holder as of the date ten (10) days prior to the date
of such notice. The General Partner also may cause the Accounting Firm or
another firm of independent public accountants selected by it to calculate the
number of Units (or any other instrument evidencing ownership or assignment of
Partnership Interests) to be held by each Record Holder after giving effect to
such distribution, subdivision or combination. The General Partner shall be
entitled to rely on any certificate provided by such firm as conclusive evidence
of the correctness of such a calculation.
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(c) Promptly following any such distribution, subdivision or
combination, the General Partner shall adopt such procedures as it may deem
appropriate to reflect such distribution, subdivision or combination.
(d) Notwithstanding anything herein to the contrary (including
specifically Section 5.07(e) of this Agreement) and in addition to the authority
of the General Partner to effect distributions, subdivisions and combinations
set forth in this Section 5.07, the General Partner, in its sole discretion
during the period ending on the first anniversary of the Closing and for the
sole purpose of reducing the number of holders of Units (or other instrument
evidencing ownership or assignment of Partnership Interests) in order to allow
the Partnership to remain exempt from regulation under the Investment Company
Act of 1940, may effect one or more combinations of Units (or other instrument
evidencing ownership or assignment of Partnership Interests) as provided in this
Subsection 5.07(d). In the event that any such combination of Units (or any
other instruments evidencing ownership or assignment of Partnership Interests)
would result in the issuance of fractional Units (or other instrument evidencing
ownership or assignment of Partnership Interests) but for the provisions of this
Section 5.07(d), the General Partner, in its sole discretion, may pay to each
Record Holder, in lieu of any fraction of a Unit (or any other instrument
evidencing ownership or assignment of Partnership Interests) issuable to each
Record Holder, an amount of cash equal to such fraction multiplied by a per Unit
price (the "Split Price") equal to the greater of (i) the average of the high
and low prices of the BCLP Units as reported on the New York Stock Exchange
("NYSE") on the five trading days immediately preceding April 17, 1998 and (ii)
the sum of (x) the average of the high and low prices of the BCLP II Units as
reported on the NYSE on the five trading days immediately preceding the date on
which such combination is announced and (y) the average of the high and low
prices of the Subordinated Debentures as reported on the NYSE on the five
trading days immediately preceding the date on which such combination is
announced. If any such combination is effected, however, holders of Units (or
any other instrument evidencing ownership or assignment of Partnership
Interests) will be given the opportunity to purchase from the Partnership, at
the Split Price, a sufficient number of Units (or other instrument evidencing
ownership or assignment of Partnership Interests) to enable each such holder to
remain a holder of Units (or other instrument evidencing ownership or assignment
of Partnership Interests) after such combination is effected.
(e) Notwithstanding any provision in this Section 5.07 (other than
Section 5.07(d)) to the contrary, no distribution, subdivision or combination of
Units (or other instrument evidencing ownership or assignment of Partnership
Interests) shall be made without a Super-Majority Vote of the Limited Partners,
unless:
(i) the Partnership shall have received an Opinion of Counsel
to the effect that such action will not have any material adverse
effect on the Federal income taxation of the Unitholders as a class or
any group of Unitholders; and
(ii) such action shall not result in any change in the rights of
any Unitholder to distributions by the Partnership or the
distributive share of such Unitholder in the profits and losses of
the Partnership (except any immaterial change resulting from any
issuance or
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elimination of fractional Units (or other instrument evidencing
ownership or assignment of Partnership Interests) permitted
hereunder).
5.08 Capital Accounts.
(a) A separate Capital Account shall be maintained for each partner.
Such accounts shall be maintained and adjusted in accordance with Regulations
under Section 704 of the Code. Consistent with such Regulations, there shall be
credited to each Partner's Capital Account the amount of any cash (which shall
not include imputed or actual interest on any deferred contributions) actually
contributed by such Partner to the capital of the Partnership, the fair market
value (without regard to Code Section 7701(g)) of any property contributed by
such Partner to the capital of the Partnership (net of any liabilities secured
by such property that the Partnership is considered to assume or take subject to
under Section 752 of the Code), such Partner's share of the Net Profits of the
Partnership and of any items in the nature of income or gain separately
allocated to the Partners and such Partner's share of any adjustments pursuant
to Section 48(q)(2) of the Code; and there shall be charged against each
Partner's Capital Account the amount of all cash distributions to such Partner,
the fair market value (without regard to Code Section 7701(g)) of any property
distributed to such Partner by the Partnership (net of any liability secured by
such property that the Partner is considered to assume or take subject to under
Section 752 of the Code), such Partner's share of the Net Losses of the
Partnership and of any items in the nature of losses or deductions separately
allocated to the Partners and such Partner's share of any adjustment pursuant to
Section 48(q)(l) of the Code.
(b) In the event that the Partnership makes an election under Code
Section 754, the amounts of any adjustments to the Carrying Values of the assets
of the Partnership made pursuant to Code Section 743 shall not be reflected in
the Capital Accounts of the Partners, but the amounts of any adjustments to the
Carrying Values of the assets of the Partnership made pursuant to Code Section
734 as a result of the distribution of property by the Partnership to a partner
(to the extent that such adjustments have not previously been reflected in the
Partners' Capital Accounts) shall be reflected in the Capital Accounts of the
Partners in the manner prescribed in Treasury Regulations under Code Section
704(b).
(c) If elected by the Partnership, upon the occurrence of any of the
following events, the Capital Account balance of each Partner shall be adjusted
to reflect the Partner's allocable share (as determined under Sections 6.01 and
6.02 below) of the Net Profits or Net Losses that would be realized by the
Partnership if it sold all of its property at its fair market value (taking Code
Section 7701(g) into account) on the day of the adjustment:
(i) any increase in any new or existing Partner's interest in
the Partnership resulting from the contribution of cash or property by
such Partner to the Partnership;
(ii) any reduction in a Partner's interest in the Partnership
resulting from a distribution to such Partner in redemption of all or a
portion of such Partner's interest in the Partnership; and
(iii) whenever else allowed under applicable Treasury Regulations.
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(d) In the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement, including the Units transferred by
the Original Limited Partner as referenced in Section 5.02(b), the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred interest.
5.09 No Interest on Amounts in Capital Account. No Partner shall be
entitled to receive any interest on its outstanding Capital Account balance.
5.10 Advances to Partnership. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such advances shall not result
in any increase in the amount of the Capital Account of such Partner or entitle
such Partner to any increase in its Percentage Interest. The amounts of any such
advances shall be a debt of the Partnership to such Partner and shall be payable
or collectible only out of the Partnership Assets in accordance with the terms
and conditions upon which such advances are made.
5.11 Liability of Limited Partners. Except as provided in the Delaware
Act and Section 5.03(b), none of the Limited Partners, as such, shall be
personally liable for any debts, liabilities, contracts or obligations of the
Partnership.
5.12 Return of Capital. No interest shall accrue on any contributions
to the capital of the Partnership, and no Partner shall have the right to
withdraw or to be repaid any capital contributed by it or to receive any other
payment in respect of its interest in the Partnership, including without
limitation as a result of the withdrawal of such Partner from the Partnership,
except as specifically provided in this Agreement.
ARTICLE VI
ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS
6.01 General Allocations of Net Profits and Net Losses.
(a) Except as provided in Section 6.02 below, the Net Profits and Net
Losses of the Partnership for any year shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(b) Allocations of Net Profits and Net Losses provided for in this
Section 6.01 shall generally be made as of the end of the Fiscal Year of the
Partnership; provided, however, that allocations of Net Profits and Net Losses
arising from a sale or other disposition of all or substantially all of the
Partnership Assets, a sale or other disposition not in the ordinary course of
business, as determined by the General Partner, of a substantial asset of the
Partnership or a liquidation of the Partnership shall be made no later than
immediately prior to the time that the proceeds from the event giving rise to
such Net Profits or Net Losses are distributed to the Partners.
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6.02 Overriding Allocations of Net Profits and Net Losses.
Notwithstanding the provisions of Section 6.01, above, the following allocations
of Net Profits and Net Losses and items thereof shall be made in the order
stated:
(a) If in any year there is a net decrease in the amount of the
Partnership's Minimum Gain computed solely with respect to the Partnership's
Nonrecourse Debt that is not Partner Nonrecourse Debt, then each Partner shall
first be allocated items of gross income (computed with the adjustments set
forth in clauses (a), (b) and (c) of the definition of "Net Profits and Net
Losses" in Article I) in accordance with the "minimum gain chargeback" provision
of Temporary Treasury Regulation Section 1.704-lT(b)(4)(iv)(e).
(b) If in any year there is a net decrease in the amount of the
Partnership's Minimum Gain computed solely with respect to Partner Nonrecourse
Debt, then each Partner shall first be allocated items of gross income (computed
with the adjustments set forth in clauses (a), (b) and (c) of Section 1.25) in
accordance with the chargeback provision of Temporary Treasury Regulation
Section 1.704-1T(b)(4)(iv)(h)(4).
(c) If, during any year a Partner unexpectedly receives any adjustment,
allocation or distribution described in Treasury Regulation Section
l.704-l(b)(2)(ii)(d)(4), (5) or (6), and, as a result of such adjustment,
allocation or distribution, such Partner's Capital Account has an Excess
Negative Balance, then items of gross income (computed with the adjustments set
forth in clauses (a), (b) and (c) of Section 1.25) for such year (and, if
necessary, subsequent years) shall first be allocated to such Partner in an
amount equal to such Partner's Excess Negative Balance.
(d) RESERVED.
(e) In no event shall Net Losses of the Partnership be allocated to a
Partner if such allocation would cause or increase an Excess Negative Balance in
such Partner's Capital Account.
(f) Any Net Losses or deductions attributable to a Partner Nonrecourse
Debt shall be allocated to the Partner who bears the economic risk of loss with
respect to such debt.
(g) In the event that Net Profits, Net Losses or items thereof are
allocated to one or more Partners pursuant to subsections (a), (b), (c), (e) and
(f) above, subsequent Net Profits and Losses will first be allocated (subject to
the provisions of subsections (a), (b), (c), (e) and (f)) to the Partners in a
manner designed to result in each Partner having a Capital Account balance equal
to what it would have been had the original allocation of Net Profits, Net
Losses or items thereof pursuant to subsections (a), (b), (c), (e) and (f) not
occurred.
(h) The respective interests of the Partners in the Net Profits and Net
Losses or items thereof shall remain as set forth above unless changed by
amendment to this Agreement or by an assignment of an interest in the
Partnership authorized by the terms of this Agreement. Except as otherwise
provided herein or as required by Code Section 704, for tax purposes, all items
of income, gain, loss, deduction or credit shall be allocated to the Partners in
the same manner as are Net Profits and Net Losses; provided, however, that if
the Carrying Value of any property of the Partnership differs from its adjusted
basis for tax purposes, then items of income, gain, loss,
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deduction or credit related to such property for tax purposes shall be allocated
among the Partners so as to take account of the variation between the adjusted
basis of the property for tax purposes and its Carrying Value in the manner
provided for under Code Section 704(c), under such method or methods as may be
selected by the General Partner.
(i) Notwithstanding the provisions of Section 6.01(a) above, if the
General Partner receives any distribution of cash or other Partnership Assets
pursuant to Section 6.03(c), the General Partner shall be allocated gross income
in an amount equal to such distribution.
6.03 Distributions.
(a) From time to time, the General Partner may determine in its sole
discretion the amount of cash or other Partnership Assets that is distributable
by the Partnership, declare the amount of any such distribution and specify a
Record Date for determining the Partners entitled to receive the distribution of
such amount. Any distributions to Partners shall be made pro rata in accordance
with the Partners' respective Percentage Interests.
(b) The General Partner may, in its sole discretion, distribute cash
from Reserves or from borrowings incurred by the Partnership for the purpose of
making distributions.
(c) In the event that all or any portion of the management fee payable
to the General Partner pursuant to Section 7.16(c) hereof is determined to be a
non-deductible partnership distribution, such fee paid to the General Partner
shall be treated under this Agreement as a special distribution, notwithstanding
the provisions of Section 6.04(a), and income shall be allocated to the General
Partner pursuant to Section 6.02(i).
(d) The General Partner may withhold taxes from distributions to any
Partner to the extent permitted by Section 8.09 below. For purposes of this
Agreement, any amount of taxes required to be withheld by the Partnership with
respect to any amount distributable by the Partnership to any Partner shall be
deemed to be a distribution or payment to such Partner and shall reduce the
amount otherwise distributable to such Partner pursuant to this Agreement.
6.04 Allocations and Distributions With Respect to Interests
Transferred or Upon Admittance.
(a) In the event that during any Fiscal Year a Partner acquires an
interest in the Partnership either by transfer from another Partner or by
acquisition from the Partnership, an equal portion of the Net Profits or Net
Losses from operations of the Partnership for such Fiscal Year shall be
allocated to each day of such year, and divided between the transferor and the
transferee based upon the number of days during such Fiscal Year for which each
party was the Record Holder of the Unit transferred, determined in accordance
with the provisions of Section 6.04(b) below.
(b) RESERVED.
(c) Notwithstanding the provisions of Section 6.04(a) and (b) above,
the gain or loss arising from a sale
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or other disposition of all or substantially all of the Partnership Assets or a
sale or other disposition not in the ordinary course of business, as determined
by the General Partner, of a substantial asset of the Partnership shall be
allocated to the Record Holder of a Unit on the date of such sale or other
disposition.
(d) Notwithstanding the provisions of Section 6.04(a), (b) and (c)
above, the Partnership will terminate within the meaning of Section 708(b)(l)(B)
of the Code upon the Effective Date, whereupon the Partnership's taxable year
will terminate, its Net Profits and Net Losses will be determined using a
"closing of the books" method and such Net Profits and Net Losses will be
allocated 1% to the General Partner and 99% to the Original Limited Partner.
(e) Distributions of cash or property in respect of a Unit shall be
made only to the Partner who, according to the books and records of the
Partnership, is the Record Holder of such Unit in respect of which such
distribution is made on the Record Date for such distribution. The Record Date
for any distribution shall be determined by the General Partner, in its sole
discretion, but shall generally be the last day of a Fiscal Year.
Notwithstanding the foregoing, any distribution of net proceeds of a sale or
other disposition of all or substantially all of the Partnership Assets, or a
sale or other disposition not in the ordinary course of business, as determined
by the General Partner, of a substantial asset of the Partnership, shall be made
to the Record Holder of such Unit on the date of such sale or other disposition.
ARTICLE VII
MANAGEMENT
7.01 Management and Control of Partnership. Subject to the limitations
of Section 7.03, and except as otherwise expressly provided or limited by the
provisions of this Agreement, the General Partner shall have the exclusive right
and full authority to manage, conduct, control and operate the business and
affairs of the Partnership, to make all decisions affecting the business and
affairs of the partnership, and to take all such actions as it deems necessary
or appropriate to accomplish the purposes of the Partnership as set forth
herein. The General Partner shall devote to the management of the business and
affairs of the Partnership such time as the General Partner, in its discretion,
shall deem to be reasonably required for the operation thereof. Neither the
General Partner nor its officers or directors shall be required to devote full
time to the business or affairs of the Partnership. Except as otherwise
expressly set forth in this Agreement, no Limited Partner, in his capacity as
such, shall have any authority, right, or power to bind the Partnership, or to
manage, or to participate in the management of, the business and affairs of the
Partnership in any manner whatsoever.
7.02 Powers of General Partners. Except as otherwise expressly provided
in this Agreement, the General Partner shall have the right, power and
authority, in the management of the business and affairs of the Partnership, to
do or cause to be done any and all acts, at the expense of the Partnership,
deemed by the General Partner to be necessary or appropriate to effectuate the
business, purposes and objectives of the Partnership, and specifically to
exercise all of the powers contained in Section 3.02 and to effectuate the
purposes specified in Section 3.01. The power and authority of the General
Partner pursuant to this Agreement shall be liberally
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construed to encompass the General Partner's undertaking, on behalf of the
Partnership, all acts and activities in which a limited partnership may engage
under the Delaware Act. The power and authority of the General Partner shall
include without limitation the power and authority on behalf of the Partnership
and at the expense of the Partnership:
(a) To cause the Partnership to acquire and own the
Partnership Assets and to take all other actions and make all decisions
in connection with the acquisition, ownership and operation of all
Partnership Assets as the General Partner, in its sole discretion,
shall deem necessary or appropriate;
(b) To make all operating decisions concerning the business of
the Partnership, including without limitation decisions on investments,
negotiation and execution of all necessary or desirable agreements in
connection therewith and selection of equipment and suppliers;
decisions concerning the development, acquisition and operation of any
other businesses, including negotiation and execution of any and all
agreements in connection therewith; and, in general, all decisions
concerning the business and activities to be carried on by the
Partnership and the manner of operation of all such business and
activities;
(c) To cause the Partnership Assets to be maintained and
operated in such manner as the General Partner may determine, subject,
however, to obligations imposed with respect to such maintenance and
operation by any mortgage or security interest encumbering all or any
portion of the Partnership Assets, and by lease, rental agreement or
other agreement pertaining thereto;
(d) To cause the Partnership to acquire, lease, dispose of
(subject to any prior approval of Limited Partners which may be
required by Section 7.03(b)), mortgage, pledge, encumber, hypothecate
or exchange any or all of the Partnership Assets;
(e) To use the assets of the Partnership (including without
limitation, cash on hand) for any purpose and on any terms it sees fit,
including without limitation the financing of Partnership operations,
the lending of funds to other Persons, the repayment of obligations of
the Partnership, the conduct of additional Partnership operations and
the purchase or acquisition of interests in properties or other assets,
including, without limitation, such interests in real property as may
be acquired in connection with arrangements for the use of facilities
in connection with the Partnership's operations or the acquisition of
any other assets or interests in property as may be deemed appropriate
in its sole discretion in connection with Partnership operations;
(f) To negotiate and execute on terms deemed desirable in its
sole discretion, and to cause the Partnership to perform, any
contracts, conveyances or other instruments that it considers useful or
necessary to the conduct of Partnership operations or the
implementation of its powers under this Agreement;
(g) To select, hire and dismiss, and to cause the Partnership
to select, hire and dismiss, employees and outside attorneys,
accountants, consultants and contractors and to determine compensation
and other terms of employment or hiring;
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(h) To form any further limited or general partnerships, joint
ventures, corporations or other entities or relationships that it deems
desirable, and contribute to such partnerships, ventures, corporations
or other entities any or all of the assets and properties of the
Partnership;
(i) To issue additional securities or additional Units or
additional classes or series of Units pursuant to the provisions of
Section 5.04 above, and to purchase, sell or otherwise acquire or
dispose of Units or such additional securities, at such time and on
such terms as it deems desirable in its sole discretion;
(j) To maintain or cause to be maintained records of all
rights and interests acquired or disposed of by the Partnership, all
correspondence relating to the business of the Partnership and the
original records (or copies on such media as the General Partner may
deem appropriate) of all statements, bills and other instruments
furnished to the Partnership in connection with its business;
(k) To maintain records and accounts of all operations and
expenditures, make all filings and reports required under applicable
rules and regulations of any governmental departments, bureau or
agency, and furnish the Partners with all necessary United States
federal, state or local income tax reporting information or such
information with respect to any other jurisdiction;
(1) To purchase and maintain, in its sole discretion and at
the expense of the Partnership, liability, indemnity and any other
insurance (including without limitation Errors and omissions insurance
and insurance to cover the obligations of the Partnership under Section
7.10), sufficient to protect the Partnership, the General Partner,
their officers, directors, employees, agents, partners and Affiliates,
or any other Person, from those liabilities and hazards which may be
insured against in the conduct of the business and in the management of
the business and affairs of the Partnership;
(m) To make, execute, assign, acknowledge and file on behalf
of the Partnership all documents or instruments of any kind which the
General Partner may deem necessary or appropriate in carrying out the
purposes and business of the Partnership, including without limitation
powers of attorney, agreements of indemnification, contracts, deeds,
options, loan obligations, mortgages, notes, documents or instruments
of any kind or character, and amendments thereto, any of which may
contain confessions of judgment against the Partnership. No Person
dealing with the General Partner shall be required to determine or
inquire into the authority or power of the General Partner to bind the
Partnership or to execute, acknowledge or deliver any and all documents
in connection therewith;
(n) To borrow money and to obtain credit in such amounts, on
such terms and conditions, and at such rates of interest and upon such
other terms and conditions as the General Partner deems appropriate,
from banks, other lending institutions or any other Person, including
the Partners, for any purpose of the Partnership, including without
limitation to obtain cash for distribution to Partners, and to pledge,
assign or otherwise
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encumber or alienate all or any portion of the Partnership Assets,
including any income therefrom, to secure or provide for the repayment
thereof. As between any lender and the Partnership, it shall be
conclusively presumed that the proceeds of such loans are to be and
will be used for the purposes authorized herein and that the General
Partner has the full power and authority to borrow such money and to
obtain such credit;
(o) To assume obligations, enter into contracts, including
contracts of guaranty or suretyship, incur liabilities, lend money and
otherwise use the credit of the Partnership, and to secure any of the
obligations, contracts, or liabilities of the Partnership by mortgage,
pledge or other encumbrance of all or any part of the property and
income of the Partnership;
(p) To invest funds of the Partnership in interest-bearing and
non-interest-bearing accounts and other investments including without
limitation obligations of federal, state and local governments and
their agencies, mutual funds (including money market funds),
mortgage-backed securities, commercial paper, repurchase agreements,
time deposits, certificates of deposit of commercial banks, savings
banks or savings and loan associations and equity or debt securities of
any type, provided that the General Partner shall not invest
Partnership funds in such a manner that the Partnership will be
considered to be holding itself out as being engaged primarily in the
business of investing, reinvesting or trading in securities or will
otherwise be deemed to be an investment company under the Investment
Company Act of 1940;
(q) To make any election on behalf of the Partnership as is or
may be permitted under the Code or under the taxing statutes or rules
of any state, local, foreign or other jurisdiction, and to supervise
the preparation and filing of all tax and information returns which the
Partnership may be required to file;
(r) To employ and engage, and to cause the Partnership to
employ and engage, suitable agents, employees, advisers, consultants
and counsel (including any custodian, investment adviser, accountant,
attorney, corporate fiduciary, bank or other reputable financial
institution, or any other agents, employees or Persons who may serve in
such capacity for the General Partner or any Affiliate of the General
Partner) to carry out any activities which the General Partner is
authorized or required to carry out or conduct under this Agreement,
including without limitation a Person who may be engaged to undertake
some or all of the general management, financial accounting and record
keeping or other duties of the General Partner, to indemnify such
Persons on behalf of the Partnership against liabilities incurred by
them in acting in such capacities and to rely on the advice given by
such Persons, it being agreed and understood that the General Partner
shall not be responsible for any acts or omissions of any such Persons
and shall assume no obligations in connection therewith other than the
obligation to use due care in the selection thereof;
(s) To pay, extend, renew, modify, adjust, submit to
arbitration, prosecute, defend, or compromise, upon such terms as it
may determine and upon such evidence as it may deem sufficient, any
obligation, suit, liability, cause of action or claim, including
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taxes, either in favor of or against the Partnership, and to compromise
the obligation of a Partner to make a contribution to the capital of
the Partnership or to return to the Partnership money or other property
paid or distributed to Partner in violation of the Delaware Act;
(t) To register, qualify, list or report, or cause to be
registered, qualified, listed or reported, the Units issued hereunder
pursuant to the Securities Act, the Exchange Act, any other securities
laws of the United States, the securities laws of any state of the
United States, or the laws of any other jurisdiction, as the General
Partner deems appropriate, or take such action as the General Partner
deems appropriate to cause the Units to cease to be subject such
registration, qualification, listing or reporting requirements;
(u) To qualify the Partnership to do business in any state,
territory, dependency or foreign country;
(v) To distribute cash or Partnership Assets to Partners in
accordance with Article VI;
(w) To elect, appoint, engage or employ officers of the
Partnership, such officers to have such powers and duties, to serve
such terms and to have such authority to bind the Partnership, as the
General Partner shall determine in its sole discretion;
(x) To take such action with respect to the manner in which
the Units are being or may be transferred or traded as the General
Partner deems necessary or appropriate (including any and all actions
that the General Partner, in its sole and absolute discretion, deems
necessary or appropriate to prevent the treatment of the Partnership as
an association taxable as a corporation for federal income tax
purposes);
(y) To adopt and use one or more seals (but a seal shall not
be required for the execution of any instruments, obligations or other
documents by the Partnership);
(z) To possess and exercise any additional rights and powers
of a general partner under the partnership laws of Delaware (including
without limitation the Delaware Act) and any other applicable laws, to
the extent not inconsistent with this Agreement;
(aa) To exercise in full all of the powers of the Partnership
as set forth in Section 3.02 and to do any and all acts and conduct all
proceedings and execute all rights and privileges, contracts and
agreements of any kind whatsoever, although not specifically mentioned
in this Agreement, that the General Partner in its sole discretion may
deem necessary or appropriate to the conduct of the business and
affairs of the Partnership or to carry out the purposes of the
Partnership. The expression of any power or authority of the General
Partner in this Agreement shall not in any way limit or exclude any
other power or authority which is not specifically or expressly set
forth in this Agreement; and
(bb) In general, to exercise any of the foregoing powers and
such other powers that the General Partner in its sole discretion may
deem necessary or appropriate to the
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conduct of any other business or activities which the Partnership is or
may in the future be engaged in pursuant to Article III of this
Agreement.
Without limitation of the other powers set forth herein, the General Partner is
expressly authorized for, in the name of, and on behalf of the Partnership, to
execute, deliver and perform the Reorganization Agreement; the Agreement and
Undertaking, dated as of June 30, 1998, in favor of the National Basketball
Association, the member teams of the NBA, NBA Properties, Inc., the NBA Market
Extension Partnership, NBA Development, LLC, Planet Insurance, Ltd., WNBA, LLC,
WNBA Enterprises LLC, any other entity formed generally by the NBA Teams after
the date of the Agreement and Undertaking and any subsidiary or affiliate of any
of the foregoing; the Management Services Agreement, dated as of June 30, 1998,
by and between Boston Celtics Limited Partnership II, Celtics Basketball, L.P.,
the Partnership, Boston Celtics Limited Partnership, Celtics Limited
Partnership, Celtics Pride, G.P., Celtics Basketball Holdings, Celtics Capital
Corporation and BCCLP Holding Corporation; and the other agreements, acts,
transactions and matters described in or contemplated by this Agreement, the
Reorganization Agreement or the Registration Statement, on behalf of the
Partnership without further act, approval or vote of the Partners or the
Partnership, notwithstanding any other provision of this Agreement, and each of
the Partners and each other Person who may acquire an interest in Units and/or
Partnership Interests hereby approves, ratifies and confirms the execution by
the General Partner of any of the foregoing agreements and the taking of any of
the foregoing actions. The participation by the General Partner in any agreement
or arrangement authorized or permitted under this Agreement shall not constitute
a breach by the General Partner of any duty that the General Partner may owe the
Partnership, or the Limited Partners under this Agreement or under the
applicable law.
7.03 Restrictions on Authority of General Partner.
(a) Notwithstanding any other provision of this Agreement, the
General Partner shall have no authority to take any action on any matter with
respect to which a Majority Vote of the Limited Partners or a Super-Majority
Vote of the Limited Partners is specifically required under this Agreement
without such vote approving such action having occurred.
(b) Notwithstanding any other provision of this Agreement, the
General Partner shall not, unless such action is proposed, recommended or
approved by the General Partner and approved by a Majority Vote of the Limited
Partners, or such action is approved by a Super-Majority Vote of the Limited
Partners, cause the Partnership to:
(i) merge or consolidate with any other partnership or other
entity, unless the Partnership is the surviving entity; or
(ii) sell all or substantially all of the Partnership Assets;
provided that such approval need not be based upon an actual sale
transaction if (A) approval is sought for an all cash sale at a
specified minimum price and (B) an all cash sale (including a sale in
which payment of all or part of the purchase price consists of the
assumption of, or taking subject to, Partnership indebtedness) for at
least the specified minimum price is consummated within one hundred
eighty (180) days following such approval; further
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provided, that such approval shall not be required for the contribution
or assignment of Partnership Assets to a partnership in which the
Partnership holds at least a majority general or limited partnership
interest; and further provided, that no such approval shall be required
with respect to such a sale in connection with the liquidation of the
Partnership pursuant to Section 13.05.
(c) Nothing in this Section 7.03 or elsewhere in this Agreement shall
be construed to restrict the ability of the General Partner or a stockholder of
the General Partner to issue, sell or transfer securities or ownership of the
General Partner.
7.04 Title to Partnership Assets. All Partnership Assets, whether real,
personal or mixed, or tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively, shall
have any ownership interest in such Partnership Assets or any portion thereof.
Title to any or all of the Partnership Assets may be held in the name of the
Partnership, of the General Partner or of one or more nominees, as the General
Partner may determine. All Partnership Assets shall be recorded as the property
of the Partnership on its books and records, regardless of the name in which
legal title to such Partnership Assets is held.
7.05 Reserves. The General Partner shall have the right to cause the
Partnership to set up such reserves, including working capital, capital
expenditure and other reserves ("Reserves") and to set aside therein such funds
as the General Partner, in its sole discretion, shall determine to be reasonable
in connection with the operation and future needs of the business of the
Partnership. Any funds set aside for such Reserves shall not be available for
current distribution under Article VI; provided that some or all of such funds
may subsequently be made available for distribution pursuant to Article VI
should the General Partner, in its sole discretion, so elect.
7.06 Other Business Activities of Partners. Any Partner or Affiliate
may have other business interests or may engage in other business ventures of
any nature or description whatsoever, whether presently existing or hereafter
created and including businesses which are competitive with the business of the
Partnership. No Partner or Affiliate thereof shall incur any liability to the
Partnership as the result of such Partner's or Affiliate's pursuit of such other
business interests and ventures and competitive activity, and neither the
Partnership nor any of the other Partners shall have any right to participate in
such other business interests or ventures or to receive or share in any income
or profits derived therefrom. Neither the General Partner nor any of its
Affiliates shall be obligated to present any particular investment opportunity
to the Partnership even if such opportunity is of a character which, if
presented to the Partnership, could be taken by the Partnership, and each of
such Persons shall have the right to take for its own account or to recommend to
others any such particular investment opportunity.
7.07 Transactions with General Partners or Affiliates; Resolution of
Conflicts of Interest. (a) In addition to transactions specifically contemplated
by the terms and provisions of this Agreement, the Partnership is expressly
permitted to enter into other transactions with any General Partner or any
Affiliates thereof or of the Partnership, provided that the terms of any such
transaction must not be less favorable to the Partnership than the terms which
would generally be obtained in a comparable transaction between unrelated
parties.
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(b) Unless otherwise expressly provided in this Agreement,
whenever a potential conflict of interest exists or arises between the General
Partner or any of its Affiliates, on the one hand, and the Partnership, any
Limited Partner or any Person who may acquire an interest in Units and/or
Partnership Interests, on the other hand, the General Partner shall resolve such
conflict of interest and any such resolution or course of action in respect of
such conflict of interest shall be permitted and deemed approved, ratified and
confirmed by all Limited Partners and other Persons who may acquire interests in
Units and/or Partnership Interests, and shall not constitute a breach of this
Agreement, of any other agreement contemplated herein, or of any duty stated or
implied by law or equity, if the resolution or course of action is or (by
operation of this Agreement) is deemed to be fair and reasonable to the
Partnership. In the absence of bad faith by the General Partner, any conflict of
interest and any resolution of such conflict of interest shall conclusively be
deemed fair and reasonable to the Partnership and shall not constitute a breach
of this Agreement, of any other agreement contemplated herein or therein, or of
any duty stated or implied by law or equity, and is hereby approved, ratified
and confirmed by all Limited Partners and other Persons who may acquire
interests in Units and/or Partnership Interests. The General Partner shall be
authorized in connection with its resolution of any conflict of interest to
consider (i) the relative interests of any party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interest; (ii) any customary or accepted industry practices;
(iii) any applicable generally accepted accounting practices or principles; and
(iv) such additional factors as the General Partner deems relevant, reasonable
or appropriate under the circumstances. However, nothing contained in this
Agreement shall require the General Partner to consider the interests of any
Person other than the Partnership.
(c) Without limitation of subsection (b) above, and notwithstanding
anything to the contrary contained in this Agreement, any conflicts of interest
of Persons described in the Registration Statement or relating to the
Reorganization are approved, ratified, confirmed and waived by all Limited
Partners and other Persons who may acquire interests in Units and/or Partnership
Interests.
7.08 Agreements of General Partner. In addition to its other duties and
obligations, the General Partner further agrees that except as specifically set
forth in Section 12.01 hereof, the General Partner shall not withdraw
voluntarily from the Partnership or otherwise cease to be a General Partner of
the Partnership except in connection with the dissolution and liquidation of the
Partnership following the sale of all or substantially all of the Partnership
Assets.
7.09 Liability of General Partners to Partnership and Limited Partners.
(a) None of the General Partners, their Affiliates, or any officers, directors,
employees and agents of the General Partners or their Affiliates shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
any of the Limited Partners for any act or omission performed or omitted by any
General Partner or such other Person in good faith and in a manner reasonably
believed by it to be within the scope of the authority granted to it by this
Agreement and in the best interests of the Partnership, provided that such act
or omission did not constitute actual fraud, gross negligence or willful
misconduct.
(b) The General Partner may exercise any of powers granted to it by
this Agreement and perform any of the duties imposed on it hereunder either
directly or through its agents, and
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the General Partner shall not be responsible for any misconduct or negligence on
the part of any such agent appointed by the General Partner in good faith.
(c) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner, any of its Affiliates or any Indemnitee is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority or latitude, the General Partner or such Affiliate
shall be entitled to consider such interests and factors as it desires and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the Partnership, or any Unitholder, or (ii) in its "good
faith" or under another express standard, the General Partner, such Affiliate or
any Indemnitee shall act under such express standard and shall not be subject to
any other or different standards imposed by this Agreement, any other agreement
contemplated hereby or applicable law.
(d) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fairness and reasonableness of such transaction,
arrangement or resolution shall be considered in the whole in the context of all
similar or related transactions and in the context of all transactions,
relationships and arrangements between or among the relevant Persons or their
respective Affiliates.
(e) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the
Partnership, the Partners or to any other Indemnitee, any Indemnitee acting
under this Agreement or otherwise shall not be liable to the Partnership, any
Partner or to any other Indemnitee for its good faith reliance on the provisions
of this Agreement. The provisions of this Agreement, to the extent that they
restrict the duties and liabilities of an Indemnitee otherwise existing at law
or in equity, are agreed by the Partners to replace such other duties and
liabilities of such Indemnitee.
7.10 Indemnification of General Partners and Affiliates.
(a) The Partnership shall indemnify and save harmless each General
Partner, its Affiliates, and all officers, directors, employees and agents of
each General Partner or its Affiliates (each an "Indemnitee") against any loss,
liability or damage incurred by such Indemnitee as a result of or in connection
with the actions of the General Partner in connection with the Partnership's
activities, provided that the activities of the General Partner did not
constitute actual fraud, gross negligence or willful misconduct and that the
General Partner acted in good faith and reasonably believed that it acted within
the scope of the authority granted to it by this Agreement and in the best
interests of the Partnership.
(b) The Partnership may purchase and maintain insurance, at the
Partnership's expense, on behalf of the General Partners and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expense that may be incurred by such Person in connection
with the Reorganization, the activities of the Partnership and/or the General
Partner's acts or omissions as General Partner of the Partnership, regardless of
whether the Partnership would have the power to indemnify such Person against
such liability under the provisions of this Agreement.
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(c) Subject to the provisions of Section 7.11, to the fullest extent
permitted by law, expenses (including legal fees incurred by an Indemnitee in
defending any claim, demand, action, suit or proceeding subject to this Section
7.10 shall, from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding on receipt by the
Partnership of an undertaking by or on behalf of the Indemnitee to repay such if
it shall be determined that such Person is not entitled to be indemnified as
authorized hereunder.
(d) The advancement of expenses and indemnification provided by this
Section 7.10 shall be in addition to any other rights to which an Indemnitee may
be entitled under any agreement, pursuant to any vote of the Unitholders, as a
matter of law or otherwise, both as to an action in the Indemnitee's capacity as
(i) the General Partner, a Departing Partner or an Affiliate thereof, (ii) an
officer, director, employee, partner, agent or trustee of the General Partner,
any Departing Partner or an Affiliate thereof, or (iii) a Person serving at the
request of the Partnership in another entity in a similar capacity, shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of
such Indemnitee.
(e) Any indemnification hereunder shall be satisfied solely out of any
insurance obtained pursuant to Section 7.10(b) or the assets of the Partnership.
In no event may an Indemnitee subject the General Partner, the Limited Partners
or assignees or Affiliates of any of them to personal liability by reason of
indemnification hereunder.
(f) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.10 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applied if the transaction
were otherwise permitted by the terms of this Agreement.
(g) The indemnification provided in this Section 7.10 is for the
benefit of the Indemnitees and their respective heirs, successors, assigns and
administrators and shall not be deemed to create any right to indemnification
for the benefit of any other Person.
(h) Notwithstanding any other provision of this Agreement, the
indemnification provisions hereof shall not be amended to limit the right of any
Person to indemnification for actions, or for failures to act, occurring prior
to the amendment.
7.11 Indemnification Procedures. (a) Notwithstanding anything to the
contrary in Section 7.10, as a condition to the receipt of any indemnification
pursuant to such Section, promptly following the Indemnitee's receipt of any
notice of the commencement of, or threatened commencement of, any action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil, criminal,
administrative or investigative (each a "Proceeding") with respect to which the
Indemnitee may be entitled to indemnification under Section 7.10, the Indemnitee
shall notify the Partnership in writing of such Proceeding or threatened
Proceeding.
(b) The Partnership shall be entitled (but shall not be obligated) to
assume the defense of any such Proceeding, with counsel reasonably acceptable to
the Indemnitee, upon delivery to
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the Indemnitee of written notice (a "Defense Notice") of the Partnership's
election to do so. In the event that the Partnership so elects to assume the
defense of a Proceeding, the Partnership will not be liable to the Indemnitee
for any attorney's fees or expenses incurred by the Indemnitee with respect to
the defense of such Proceeding after the date of the Indemnitee's receipt of the
Partnership's Defense Notice, provided that:
(i) The Indemnitee shall continue to have the right to employ
counsel in any such Proceeding at the Indemnitee's own expense; and
(ii) If (A) the employment of counsel by the Indemnitee has
previously been authorized in writing by the Partnership, or (B) the
Partnership shall have reasonably concluded, and shall have advised the
Indemnitee in writing, that there may be a conflict of interest between
the Partnership and the Indemnitee in the conduct of such defense, or
(C) the Partnership shall not, in fact, have employed counsel to assume
the defense of such Proceeding, then the fees and expenses of the
Indemnitee's counsel shall be paid by the Partnership in accordance
with Section 7.10(c).
(c) The Partnership may, without the consent of the Indemnitee, settle
any claim in any Proceeding for which it is obligated to provide indemnity under
Section 7.10, and, as a condition to the Indemnitee's receipt of such
indemnification, the Indemnitee shall take all such actions required to
cooperate in effecting such settlement; provided, however, the Partnership shall
not settle any claim in any manner that would impose any penalty or limitation
on the Indemnitee without the Indemnitee's written consent (which may not be
unreasonably withheld or delayed).
7.12 No Management or Control by Limited Partners. No Limited Partner,
in his capacity as such, shall take part in the management, operation or control
of the business or affairs of the Partnership. The Limited Partners shall not
have any right, power or authority to transact any business in the name of the
Partnership or to act for or on behalf of or to bind the Partnership. The
Limited Partners shall have no rights other than those specifically provided
herein or granted by law where consistent with a valid provision hereof. The
Limited Partners shall not be deemed to be participating in the control of the
business of the Partnership within the meaning of the Delaware Act by virtue of
their possessing or exercising any rights as set forth in this Agreement or the
Delaware Act.
7.13 Other Matters Concerning the General Partner.
(a) The General Partner and each Indemnitee may rely on and shall be
protected in acting or refraining from acting on any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. None of such Persons
shall be liable to the Partnership, any other Partner or any other Indemnitee
for, and each such Person shall be protected in, acting, or refraining from
acting, in good faith reliance on the provisions of this Agreement, and the good
faith exercise of any of the powers or rights granted to any of them by this
Agreement and the delegation of power and authority required by this Agreement,
shall not constitute a breach of fiduciary duty to any Partner.
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(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it and any opinion of any such Person as to matters that
the General Partner reasonably believes to be within such Person's professional
or expert competence (including without limitation any opinion of legal counsel
to the effect that the Partnership would "more likely than not" prevail with
respect to any matter) shall be full and complete authorization and protection
in respect to any action taken, suffered or omitted by the General Partner
hereunder in good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through a duly appointed attorney or
attorneys-in-fact. Each such attorney or attorney-in-fact shall, to the extent
provided by the General Partner in the power of attorney, have full power and
authority to do and perform all and every act and duty which is, permitted or
required to be done by the General Partner hereunder. Each such appointment
shall be evidenced by a duly executed power of attorney giving and granting to
each such attorney or attorney-in-fact, to the extent provided by the General
Partner, full power and authority to do and perform all and every act and thing
requisite and necessary to be done by the General Partner in connection with the
Partnership.
(d) Any Person dealing with the Partnership or the General Partner may
rely upon a certificate signed by the General Partner as to: (i) the identity of
any Partner hereof; (ii) the existence or non-existence of any fact or facts
which constitute a condition precedent to acts by a General Partner or which are
in any other manner germane to the affairs of the Partnership; (iii) the Persons
who are authorized to execute and deliver any instrument or document of or on
behalf of the Partnership; or (iv) any act or failure to act by the Partnership
or as to any other matter whatsoever involving the Partnership or any Partner.
(e) Notwithstanding any other provisions of this Agreement to the
contrary, any Person dealing with the Partnership shall be entitled to assume
that the General Partner has full power and authority to encumber, sell or
otherwise use, in any manner, any and all assets of the Partnership and to enter
into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Partner (other than the
General Partner) and other Person who may acquire an interest in Units and/or
Partnership Interests or other securities issued by the Partnership hereby
waives any and all defenses or other remedies that may be available against such
Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or the General Partner's representative with respect to any
business or property of the Partnership be obligated to ascertain that the terms
of this Agreement have been complied with, or be obligated to inquire into the
necessity or expedience of any act or action of the General Partner or the
General Partner's representative. Each and every contract, agreement, deed,
mortgage, security agreement, promissory note or other instrument or document
executed by the General Partner or the General Partner's representative with
respect to any business or property of the Partnership shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery thereof this Agreement was in
full force and effect, (ii) such instrument or document was duly executed in
accordance with the terms
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and provisions of this Agreement and is binding upon the Partnership, and (iii)
the General Partner or the General Partner's representative was duly authorized
and empowered to execute and deliver any and every such instrument or document
for and on behalf of the Partnership.
7.14 Loans to or from the General Partner.
(a) The General Partner and any of its Affiliates may, but are not
obligated to, lend to the Partnership funds needed by the Partnership for such
periods of time as the General Partner may determine; provided, however, that in
no event shall such indebtedness be on terms and conditions less favorable to
the Partnership than the Partnership could obtain from unaffiliated third
parties or banks for the same purpose (without reference to the General
Partner's financial abilities or guarantees).
(b) The Partnership shall be authorized to lend funds to any General
Partner or any of its Affiliates for such periods of time as the Partnership may
determine; provided, however, that in no event shall such indebtedness be on
terms and conditions less favorable to the Partnership than the Partnership
could obtain with respect to loans to unaffiliated third parties having like
credit standing.
7.15 Purchase or Sale of Units. The General Partner may cause the
Partnership to purchase or otherwise acquire (or may purchase or otherwise
acquire on behalf of the Partnership) Units or Partnership Interests (or other
securities issued by the Partnership) and, following any such purchase or
acquisition, may sell or otherwise dispose of such Units, Partnership Interests
or other securities. As long as such Units, Partnership Interests or securities
are held by the Partnership, such Units, Partnership Interests or other
securities shall not be considered outstanding for any purpose. The General
Partner and its Affiliates may also purchase or otherwise acquire and sell or
otherwise dispose of Units, Partnership Interests or other securities for their
own accounts.
7.16 Partnership Expenses; Fees to General Partner.
(a) All of the Partnership's expenses shall be billed directly to and
paid by the Partnership. The Partnership shall pay the following costs and
expenses: (i) all costs of personnel employed full- or part-time by the
Partnership, (ii) all costs of borrowed money, taxes and assessments on the
property of the Partnership and other taxes applicable to the Partnership, (iii)
legal, audit, accounting, brokerage and appraisal fees, (iv) printing, engraving
and other expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and recording of documents evidencing
ownership of Units or other interests in the Partnership or in connection with
the business of the Partnership, (v) fees paid to escrow agents for services
provided in connection with the sale of Units, (vi) fees and expenses paid to
mortgage bankers, brokers and servicers, real estate brokers and insurance
brokers (vii) costs and expenses in connection with the acquisition, sale or
other disposition, rehabilitation, replacement, alteration, repair, remodeling,
refurbishment, leasing, financing, refinancing, operation and maintenance of the
Partnership Assets, (viii) the cost of insurance in connection with the business
of the Partnership and the ownership of the Partnership Assets, (ix) expenses of
organizing, revising, amending, converting, modifying or terminating the
Partnership, (x) the costs and expenses
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incurred in qualifying the Partnership to do business in any jurisdiction,
including fees and expenses of any resident agent appointed by the Partnership,
(xi) any cost of preparing and disseminating to Limited Partners the reports
described in Section 8.04 and the cost of preparing and filing reports and tax
returns with governmental agencies, (xii) expenses in connection with
distributions made by the Partnership, and communications and bookkeeping and
clerical work necessary in maintaining relations with the Limited Partners,
including the costs of printing and mailing to such Persons evidences of
ownership of Units and reports of meetings of the Partnership, and of
preparation of proxy and information statements and solicitations of proxies and
consents in connection therewith, (xiii) the costs incurred in connection with
any Proceeding in which the Partnership is involved, (xiv) accounting, computer,
statistical or bookkeeping costs necessary for the maintenance of the books and
records of the Partnership and (xv) amounts payable to the General Partner as
reimbursements in accordance with Section 7.16(b) hereof.
(b) The Partnership will reimburse the shareholders of the General
Partner for out-of-pocket expenses incurred by them acting in their capacities
as officers or directors of the General Partner or the Partnership, but will not
otherwise compensate the shareholders of the General Partner. Individuals who
are not shareholders of the General Partner who perform services for both the
Partnership and the General Partner may be compensated by the Partnership for
their services and may also receive reimbursements for out-of-pocket expenses.
(c) The Partnership shall be authorized to pay to the General Partner a
management fee.
ARTICLE VIII
BANK ACCOUNTS; BOOKS AND RECORDS; FISCAL YEAR STATEMENTS; TAX MATTERS
8.01 Bank Accounts. The bank accounts of the Partnership shall be
maintained in such banking institutions as the General Partner shall determine.
All deposits and other funds not needed in the operation of the business may be
invested in United States government securities, securities issued or fully
guaranteed by United States government agencies, certificates of deposit and
time or demand deposits in commercial banks having a net worth of at least
$25,000,000, prime commercial paper and public investment companies registered
with the Commission whose assets exceed $50,000,000 and are invested in the
foregoing types of investments. The General Partner shall have fiduciary
responsibility for the safekeeping and use of the funds of the Partnership,
whether or not in the possession and control of the General Partner, and the
General Partner shall not employ nor permit any other Person to employ such
funds except in accordance with the terms of this Agreement. All withdrawals
from or charges against such accounts shall be made by the officers, employees
or agents of the Partnership. The funds of the Partnership shall not be
commingled with the funds of any other Person.
8.02 Books and Records.
(a) The General Partner shall keep, or cause to be kept, accurate, full
and complete books and accounts with respect to the Partnership, showing assets,
liabilities, income, operations,
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transactions and the financial condition of the Partnership. The General Partner
shall also keep, or cause to be kept, and updated quarterly, an alphabetical
list of the names and addresses of the Limited Partners including the number of
Units held by each of them. Such books and accounts shall be prepared and
maintained on the accrual or cash basis of accounting as determined from time to
time by the General Partner in its sole discretion. The General Partner shall
maintain and preserve all Partnership books and records for such period as the
General Partner, in its sole discretion, shall determine to be necessary or
appropriate subject to any requirements of state or federal law.
(b) The books, accounts and records of the Partnership shall be
maintained at all times in the Partnership's principal office or, at the option
of the General Partner, at the principal place of business of the General
Partner. Each Limited Partner shall have the right, at reasonable times and at
such Limited Partner's own expense, but only upon twenty (20) days' prior
written notice to the General Partner in accordance with Section 16.01, and only
for a purpose reasonably related to the interests of such Person as a Limited
Partner, (i) to inspect and copy books and records of the Partnership reasonably
requested by the Limited Partner, (ii) to have a current list of the name and
last known business, residence or mailing address of each Partner, and (iii) to
have a copy of this Agreement, the Certificate of Limited Partnership and all
amendments thereto or restatements thereof.
(c) Anything in this Section 8.02 to the contrary notwithstanding, the
General Partner, in its sole discretion, may refuse any Limited Partner access
to any information, records, documents or data that the General Partner
determines to be confidential or the disclosure of which the General Partner in
good faith believes is not in the best interest of the Partnership or could
damage the Partnership or its business.
8.03 Fiscal Year. The Fiscal Year of the Partnership for financial and
federal, state and local income tax purposes shall end on December 31 of each
year. The General Partner shall have authority to change the beginning and
ending dates of the Fiscal Year if the General Partner, in its sole discretion,
subject to any required approval by the Internal Revenue Service, shall
determine such change to be necessary or appropriate to the business of the
Partnership, and shall give written notice of any such change to the Limited
Partners in the next regular mailing of the Partnership.
8.04 Financial Statements and Information.
(a) All financial statements shall be prepared on the same basis as
determined by the General Partner under Section 8.02, for each Fiscal Year of
the Partnership during the term of this Agreement.
(b) For so long as the Partnership is required to file periodic reports
containing financial and other information with the Commission, the General
Partner will furnish to any Record Holder of a Unit, upon request of such Record
Holder, copies of such reports in the form filed with the Commission. The
General Partner shall provide to Record Holders of Units such additional reports
and information concerning the business and affairs of the Partnership as the
General Partner, in its sole discretion, may deem necessary or appropriate, or
as required by law.
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(c) The General Partner shall provide any of the reports or other
information referred to in this Section 8.04 to such federal, state or local
governments, governmental agencies or other regulatory entities as the General
Partner, in its sole discretion, may deem necessary or appropriate.
8.05 Accounting Decisions. All decisions as to accounting matters,
except as specifically provided to the contrary herein, shall be made by the
General Partner.
8.06 Preparation of Tax Returns. The General Partner, at the expense of
the Partnership, shall arrange for the preparation and timely filing of all tax
and information returns of the Partnership showing all income, gains, deductions
and losses necessary for federal and state income tax purposes, and shall
furnish to the Limited Partners within seventy-five (75) days after the close of
each Fiscal Year the tax information reasonably required for federal and state
income tax reporting purposes. The classification, realization and recognition
of income, gains, losses, deductions and other items of the Partnership shall be
on the accrual or cash method of accounting for federal income tax purposes, as
determined from time to time by the General Partner in its sole discretion.
8.07 Tax Elections. Except as otherwise specifically provided herein,
the General Partner shall, in its sole discretion, determine whether to make any
available election including without limitation the elections provided for in
Sections 48(q)(4), 168 and 754 of the Code on behalf of the Partnership.
8.08 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated as the "tax matters partner" (as defined in Section
6231(a)(7) of the Code) of the Partnership and is authorized to represent the
Partnership (at the expense of the Partnership) in connection with all
examinations of the affairs of the Partnership by any federal, state or local
tax authorities, including any resulting administrative and judicial
proceedings, and to make expenditures of Partnership funds for professional
services and costs associated therewith.
8.09 Withholding Requirements.
(a) The General Partner may assume that any Limited Partner who fails
to provide to the General Partner satisfactory evidence of its tax status for
United States federal income tax purposes is a foreign person taxable at the
highest rates applicable to any taxpayer.
(b) Each Limited Partner hereby authorizes the Partnership to withhold
from, or pay on behalf of or with respect to, such Limited Partner any amount of
Federal, state, local or foreign taxes that the General Partner determines that
the Partnership is required by law to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to sections 1441, 1442, 1445, or 1446 of the Code. Any
amount so paid on behalf of or with respect to a Limited Partner will constitute
a loan by the Partnership to such Limited Partner, which loan will be repaid by
such Limited Partner within 15 days after notice from the General Partner that
such payment must be made unless (i) the Partnership withholds such payment from
a distribution that would otherwise be made to the Limited Partner; or (ii) the
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General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership that
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) will be treated as having
been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 8.09. In the event that a Limited Partner fails to pay when due any
amounts owed to the Partnership pursuant to this Section 8.09, the General
Partner may, in its sole and absolute discretion, elect to make the payment to
the Partnership on behalf of such defaulting Limited Partner, and in such event
will be deemed to have loaned such amount to such defaulting Limited Partner and
will succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner. Without limitation, in such event, the General
Partner will have the right to receive distributions that would otherwise be
distributable to such defaulting Limited Partner until such time as such loan,
together with all interest thereon, has been paid in full, and any such
distributions so received by the General Partner will be treated as having been
distributed to the defaulting Limited Partner and immediately paid by the
defaulting Limited Partner to the General Partner in repayment of such loan. Any
amount payable by a Limited Partner hereunder will bear interest at the highest
base or prime rate of interest published from time to time by any of Citibank,
N.A., Chase Manhattan Bank, and Morgan Guaranty Trust Company of New York, plus
four percentage points, but in no event higher than the maximum lawful rate of
interest on such obligation, such interest to accrue from the date such amount
is due (i.e., 15 days after demand) until such amount is paid in full. Each
Limited Partner will take such actions as the Partnership or the General Partner
requests in order to perfect or enforce the security interest created hereunder.
ARTICLE IX
OWNERSHIP OF UNITS
9.01 Record Holder.
(a) The Partnership may, but shall not be required to, issue
certificates evidencing ownership of Units. The Partnership shall be entitled to
treat each Record Holder as the Limited Partner in fact with respect to any
Units, and, accordingly, shall not be required to recognize any equitable or
other claim or interest in or with respect to such Units on the part of any
other Person, regardless of whether it shall have actual or other notice
thereof, except as otherwise required by law or other applicable rule,
regulation, guideline or requirement. Neither Units nor any other securities
issued by the Partnership pursuant to Section 5.04 hereof may be held in the
names of nominees or other "street name" holders.
(b) If the General Partner causes the Partnership to issue certificates
evidencing the ownership of Units, or any class or series of Units, such
certificates shall be in such form as the General Partner shall approve and the
General Partner shall keep or cause to be kept a register in which, subject to
such procedures as the General Partner may adopt, the Partnership will provide
for the registration of certificated Units and the registration of transfers of
such Units. The General Partner may maintain such register or cause the
Partnership to engage registrars and/or
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transfer agents. The General Partner may adopt procedures in accordance with
which the Partnership shall issue new certificates in place of previously issued
certificates that have been lost, destroyed or stolen. A Unit evidenced by a
certificate shall constitute a security for all purposes of Article 8 of the
Uniform Commercial Code promulgated by the National Conference of Commissioners
on Uniform State Laws, as in effect in Delaware or any other applicable
jurisdiction. Delaware law shall constitute the local law of the Partnership's
jurisdiction in its capacity as the issuer of certificated Units.
ARTICLE X
TRANSFER OF PARTNERSHIP INTERESTS AND UNITS
10.01 Transfer.
(a) The term "transfer," when used in this Article X with respect to
Partnership Interests or Units, shall include any sale, assignment, gift,
pledge, hypothecation, mortgage, exchange or other disposition thereof.
(b) No Partnership Interest or Unit shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article X. Any transfer or purported transfer of any Partnership Interest or
Unit not made in accordance with this Article X shall be null and void.
(c) The Partnership will not participate in the establishment of any
Market for any interests in the Partnership or in the inclusion of any interests
in the Partnership thereon, nor will the Partnership recognize any transfers
made on any Market by redeeming the transferor Partner or admitting the
transferee as a Partner or otherwise recognizing any rights of the transferee.
10.02 Transfer of Interest of General Partner.
(a) Other than as provided in subsections (b) and (c) below, a General
Partner may not transfer all or any part of its Partnership Interest as a
General Partner or otherwise withdraw from the Partnership or cease to act as a
General Partner unless (i) the Partnership receives an Opinion of Counsel that
such transfer would not result in the loss of limited liability of any Limited
Partner under the Delaware Act or cause the Partnership to be treated as an
association taxable as a corporation for federal income tax purposes, and (ii)
if such transfer is a transfer of all of the General Partner's Partnership
Interest to a non-Affiliate, a Majority Vote of the Limited Partners is obtained
consenting to such transfer.
(b) Neither subsection (a) of this Section 10.02 nor any other
provision of this Agreement shall be construed to prevent (and all Partners
hereby expressly consent to) (i) the transfer by a General Partner of its
Partnership Interest to an Affiliate, or (ii) the transfer by a General Partner
of its Partnership Interest upon its merger or consolidation with or into any
other entity or the transfer by it of all or substantially all of its assets to
another entity, which Affiliate or other entity is controlled by the General
Partner or the stockholders of the General Partner, and the assumption of the
rights and duties of the General Partner by such Affiliate or such transferee
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entity, provided that such Affiliate furnishes to the Partnership an Opinion of
Counsel that such transfer, merger, consolidation or assumption will not result
in a loss of limited liability of any Limited Partner under the Delaware Act or
result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes.
(c) Neither Section 10.02(a) nor any other provision of this Agreement
shall be construed to prevent (and all Partners hereby expressly consent to) the
assignment by a General Partner of all or any part of its interest in items of
Partnership income, gains, losses, deductions, credits, distributions or
capital.
10.03 Transfer of Units.
(a) In accordance with Section 5.02(b) and the terms of the
Reorganization Agreement, on the Effective Date the Original Limited Partner
shall transfer its Units to Castle Creek Electing Unitholders. Notwithstanding
any other provision of this Agreement, the General Partner shall approve the
transfer of all such Units and enter the names of the persons receiving such
Units as Limited Partners on the books of the Partnership and such persons, as
of the Effective Date, shall constitute Substituted Limited Partners. Each
Castle Creek Electing Unitholder, by his acceptance of Units transferred from
the Original Limited Partner, will be deemed to have agreed to be bound by all
of the terms of this Agreement.
(b) Except as provided in the foregoing subparagraph (a), no Limited
Partner may transfer his Units other than by gift, bequest or intestate
succession, in accordance with the provisions of Section 10.03(c) below or in
accordance with such other procedures as the General Partner may establish from
time to time in its sole discretion. In any event, no Limited Partner may
transfer any Units:
(i) if in the opinion of counsel to the Partnership such
transfer (A) would be in violation of any state securities or "blue sky" laws or
(B) would, when added to the total of the Units sold or exchanged within a
period of twelve consecutive months prior thereto, result in the termination of
the Partnership under Section 708 of the Code;
(ii) if the General Partner determines in good faith that such
transfer might result in the Partnership not being taxed or classified as a
partnership under the Code; or
(iii) if in the opinion of counsel to the Partnership, such
transfer would affect the Partnership's existence or qualification as a limited
partnership under any applicable state or local law.
Any attempted transfer in contravention of the provisions of this Section 10.03
or Section 10.04(b) shall be void and ineffectual and shall not bind or be
recognized by the Partnership.
(c) A Limited Partner may apply to transfer his Units by submitting to
the General Partner, no earlier than November 15 and no later than December 15
of any Fiscal Year, a completed Transfer Application. In considering completed
Transfer Applications, the General Partner may, but shall not be required to,
give preference to requests from Limited Partners for
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odd-lot transfers (less than 100 Units), establish ceilings on the numbers of
Units which may be transferred in any year, approve the transfer of less than
the total number of Units requested to be transferred by any Limited Partner
and, in its sole discretion, use other means to apportion its approval of
proposed transfers including, but not limited to, a lottery system. All
transfers of Units approved by the General Partner under this Section 10.03(c)
shall be effective as of January 1 of the Fiscal Year immediately following the
Fiscal Year in which the applicable Transfer Application is submitted to the
General Partner. Notwithstanding any other provision of this Agreement, the
General Partner may, in its sole discretion, accept, consider and approve one or
more Transfer Applications and effect one or more transfers of Units at any
time.
(d) Each distribution in respect of a Unit shall be paid by the
Partnership, directly or through the Transfer Agent or through any other person
or agent, only to the Record Holder of such Unit as of the Record Date set for
such distribution, determined in accordance with the provisions of Section 6.03.
Such payment shall constitute full payment and satisfaction of the Partnership's
liability in respect of such payment, regardless of any claim of any Person who
may have an interest in or with respect to such payment by reason of any
assignment or otherwise.
(e) The transfer of a Partnership Interest or Unit shall be subject to
any applicable requirements or restrictions of the National Basketball
Association applicable to the Partnership. No Partnership Interest or Unit may
be transferred or otherwise disposed except in accordance with such requirements
or restrictions; any transfer or purported transfer or disposition of any
Partnership Interest or Unit not made in accordance with such requirements or
restrictions will be null and void.
(f) Each provision of this Section 10.03 is subject to the terms of
Section 10.01(c) of this Agreement.
10.04 Transferees and Substituted Limited Partners.
(a) The death, dissolution, adjudication of incompetence or bankruptcy
of a Limited Partner shall not dissolve the Partnership.
(b) The Partnership need not recognize for any purpose any transfer of
all or any fraction of the Units of a Limited Partner unless there shall have
been filed with the Partnership a duly executed counterpart of the Transfer
Application making such transfer, and such Transfer Application (i) contains a
representation of the transferee that such transfer is being made in accordance
with all applicable laws and regulations (including investment suitability
requirements) and (ii) otherwise is satisfactory in form and substance to the
General Partner.
(c) Any Limited Partner who shall transfer all his Units shall cease to
be a Limited Partner of the Partnership. The rights of a transferee of Units who
does not become a Substituted Limited Partner shall be limited to receipt of his
share of distributions, Net Profits and Net Losses as determined under Article
VI and distributions upon liquidation as determined under Section 13.05, and
Units held by any such transferee shall be deemed not to be outstanding for
purposes of determining the voting or consent rights of Limited Partners
hereunder.
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(d) Except as provided in Section 10.03(a) above, a transferee of Units
may become a Substituted Limited Partner only if all of the following conditions
are first satisfied:
(i) The General Partner, in its sole discretion, consents in
writing to such substitution;
(ii) The transferee shall have fulfilled the requirements of
Section 10.03(c) and Section 10.04(b); and
(iii) The transferee shall have paid all reasonable legal fees
and filing costs incurred by the Partnership in connection with his
substitution as a Limited Partner.
(e) The Agreement of Limited Partnership of the Partnership shall be
amended on the first day of each Fiscal Year to recognize the admission of
Substituted Limited Partners.
(f) A transferee of Units who does not become a Substituted Limited
Partner and who desires to make a further transfer of his Units shall be subject
to all the provisions of this Article X to the same extent and in the same
manner as a Limited Partner desiring to make a transfer of Units.
(g) Each provision of this Section 10.04 is subject to the terms of
Section 10.01(c) of this Agreement.
ARTICLE XI
ADDITIONAL GENERAL PARTNERS
11.01 Admission of an Additional or Successor General Partner. At any
time, an additional General Partner (or a successor General Partner in the case
of the removal of a General Partner pursuant to Section 12.02) may be elected
upon the consent of any existing General Partners and a Super-Majority Vote of
the Limited Partners and by amending this Agreement and the Certificate of
Limited Partnership to add such Person or Persons as a General Partner and to
provide for the duties and rights of, and the management of the Partnership by,
multiple General Partners. An additional or successor General Partner selected
pursuant to the preceding sentence or the transferee of all or any portion of
the General Partner's Partnership Interest as a General Partner pursuant to
Section 10.02 shall be admitted to the Partnership as a General Partner (in the
place, in whole or in part, of the transferor or former General Partner, if
applicable), effective as of the date that an amendment of the Certificate of
Limited Partnership, adding the name of such additional or successor General
Partner and other required information, is filed pursuant to Section 2.01 (which
admission, in the event the successor General Partner is replacing a transferor
or former General Partner, shall, and shall be deemed for all purposes to, occur
immediately prior to the effective time and date of withdrawal of such
transferor or former General Partner), and upon receipt by the transferor or
former General Partner, if applicable, and the Partnership of all of the
following:
(a) an Opinion of Counsel to the effect that the admission of
such Person as a General Partner would not result in the loss of
limited liability of any Limited Partner
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under the Delaware Act or cause the Partnership to be treated as an
association taxable as a corporation for federal income tax purposes;
(b) the additional or successor General Partner's acceptance
of, and agreement to be bound by, all of the terms and provisions of
this Agreement, in form and substance satisfactory to the transferor or
former General Partner, if applicable;
(c) evidence of the authority of such additional or successor
General Partner to become a General Partner and to be bound by all of
the terms and conditions of this Agreement;
(d) the written agreement of such additional or successor
General Partner to continue the business of the Partnership in
accordance with the terms and provisions of this Agreement (it being
the intent of the parties to this Agreement that any such successor
General Partner, together with all then remaining General Partners,
shall continue the business of the Partnership without dissolution);
(e) such other documents or instruments as may be required in
order to effect the admission of the additional or successor General
Partner as a General Partner under this Agreement; and
(f) in the case of withdrawal of the General Partner, an
Opinion of Counsel that such withdrawal would not jeopardize any
material license or authorization issued or assigned to the
Partnership.
ARTICLE XII
WITHDRAWAL OR REMOVAL OF GENERAL PARTNERS
12.01 Withdrawal of General Partner. A General Partner may voluntarily
withdraw from the Partnership only upon a transfer of all of its Partnership
Interests as a General Partner in accordance with the provisions of Section
10.02, such withdrawal to take effect only following the admission of a
successor General Partner pursuant to Section 11.01. Upon the transfer of the
General Partner's Partnership Interest in accordance with the provisions of
Section 10.02, the transferee shall become the General Partner, unless all of
the General Partners remaining after such transfer shall otherwise agree. A
General Partner shall have no liability to the Partnership or the Partners on
account of any withdrawal made in accordance with the terms of this Section
12.01.
12.02 Removal of General Partner.
(a) A General Partner may be removed as General Partner only for
"Cause" upon a Super-Majority Vote of the Limited Partners. For purposes of this
Subsection 12.02, "Cause" shall be defined as a finding by a United States
federal or state court of competent jurisdiction (i) that the General Partner
has violated its fiduciary duty to the Partnership or the Limited Partners; (ii)
that the General Partner has breached a material provision of this Agreement and
such breach has had a material adverse effect upon the Partnership or its
assets; or (iii) of actual fraud, gross
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negligence or willful misconduct by the General Partner in the management of the
affairs of the Partnership. In connection with any removal of a General Partner,
the Limited Partners shall appoint a successor General Partner pursuant to a
Super-Majority Vote of the Limited Partners in accordance with Section 11.01
(provided that no consent of the General Partner to be removed shall be
required).
(b) The Limited Partners shall promptly give the affected General
Partner notice of any action taken pursuant to Section 12.02(a) above in the
manner set forth in Section 16.01. Such notice shall set forth the date upon
which such removal is to become effective, which date shall be the date of
admission of a successor General Partner to the Partnership and the notice shall
so state and shall further state the proposed date of such admission.
(c) A General Partner removed as a General Partner pursuant to this
Section 12.02 shall not have any right to participate in the management or
control of the Partnership upon the effective date of such removal.
12.03 Amendment of Agreement and Certificate of Limited Partnership.
This Agreement and the Certificate of Limited Partnership shall be amended by
the General Partner or General Partners without any further requirement for the
vote or approval of any Limited Partners to reflect the withdrawal, removal or
succession of a General Partner.
12.04 Interest of Departing Partner and Successor.
(a) Upon the removal or withdrawal of a Departing Partner, such
Departing Partner's Partnership Interest as a General Partner shall be converted
into a number of Units so that the Percentage Interest held by such Departing
Partner after removal or withdrawal, but prior to any dilution, if any, of the
Partnership Interests held by all Limited Partners (including the Departing
Partner) that results from the admission to the Partnership of a successor
General Partner, equals its Percentage Interest prior to removal.
(b) Any successor General Partner elected pursuant to Section 11.01
shall, at the effective date of its admission to the Partnership as a General
Partner, make such Capital Contribution as shall be approved by a Majority Vote
of the Limited Partners at the time of such election. Thereafter, such successor
General Partner shall, notwithstanding any other provision of this Agreement, be
entitled to one percent (1%) of all Partnership allocations and distributions.
(c) If, at the time of the Departing Partner's departure, the
Partnership is indebted to the Departing Partner or any Affiliate of the
Departing Partner under this Agreement or any other instrument or agreement for
funds advanced, properties sold, services rendered, or costs and expenses
incurred by the Departing Partner or such Affiliate (including without
limitation any amounts advanced pursuant to Section 7.14), the Partnership
shall, no later than ten (10) days prior to the effective date of the departure
of such Departing Partner or Affiliate, pay to the Departing Partner or such
Affiliate the full amount of such indebtedness and all accrued interest thereon.
The successor to the Departing Partner shall assume all obligations theretofore
incurred by the Departing Partner as General Partner of the Partnership, and the
Partnership and such successor shall take all such action as shall be necessary
to terminate any guarantees of the
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Departing Partner and any of its Affiliates of any obligations of the
Partnership. If, for any reason, the creditors of the Partnership shall not
consent to such termination of any such guarantees, the successor to the
Departing Partner and the Partnership shall be required to indemnify the
Departing Partner for any liabilities and expenses incurred by the Departing
Partner on account of such guarantees.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.01 No Dissolution. The Partnership shall not be dissolved by the
admission of additional Limited Partners or Substituted Limited Partners or by
the admission of additional General Partners or successor General Partners in
accordance with the terms of this Agreement.
13.02 Events Causing Dissolution. Subject to the provisions of Section
13.03, the Partnership shall be dissolved and its affairs wound up upon the
occurrence of the earliest to occur of the following events:
(a) the expiration of the term of the Partnership, as provided in
Section 4.01;
(b) the death, incapacity, dissolution or other withdrawal of a General
Partner, but excluding (i) an event referred to in Section 17-402(4) or (5) of
the Delaware Act or (ii) the withdrawal of a General Partner where a successor
General Partner is admitted pursuant to Section 11.01.
(c) the "Bankruptcy" (as hereinafter defined) of a General Partner;
(d) the sale by the Partnership of all or substantially all of the
Partnership Assets;
(e) sixty (60) days after notice to the Limited Partners of the General
Partner's election to dissolve the Partnership, provided that a Majority Vote of
the Limited Partners has been obtained consenting thereto; or
(f) except as otherwise expressly provided herein, the occurrence of
any other event that, under the Delaware Act, would cause the dissolution of the
Partnership or that would make it unlawful for the business of the Partnership
to be continued.
For purposes of this Agreement, the term "Bankruptcy" shall mean, and a
General Partner shall be deemed "Bankrupt" upon (i) the entry of a decree or
order for relief with respect to such General Partner by a court of competent
jurisdiction in any involuntary case involving such General Partner under any
bankruptcy, insolvency, or other similar law now or hereafter in effect; (ii)
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar agent for such General Partner or for
substantially all of such General Partner's assets or property; (iii) the
commencement by such General Partner of a voluntary case under any bankruptcy,
insolvency or other similar law now or hereafter in effect; (iv) the consent by
such General Partner to the entry of an order for relief in an involuntary case
under any such law or to the appointment of or the taking of possession by a
receiver, liquidator, assignee, trustee,
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custodian, sequestrator or other similar agent for such General Partner or for
substantially all of such General Partner's assets or property; or (v) the
making by such General Partner of any general assignment for the benefit of
creditors.
13.03 Right to Continue Business of Partnership. Upon an event
described in Sections 13.02(b), 13.02(c) or 13.02(f) (but not an event described
in Section 13.02(f) that makes it unlawful, by judicial order or otherwise, for
the business of the Partnership to be continued), the Partnership thereafter
shall be dissolved and liquidated unless (a) within ninety (90) days after the
event described in any of such Sections, an election to continue the business of
the Partnership shall be made in writing by any remaining General Partner or
General Partners, in its or their sole discretion, or (b) in the event of the
withdrawal of the last remaining General Partner, or in the event the remaining
General Partners do not elect to continue the business of the Partnership,
within one hundred twenty (120) days after the occurrence of the event described
in Section 13.02(b), 13.02(c) or 13.02(f), the Limited Partners, by a Majority
Vote of the Limited Partners, elect to continue the Partnership and (if
necessary or desired) appoint, effective as of the date of withdrawal of the
former General Partners, one or more successor General Partners.
13.04 Dissolution. Upon the dissolution of the Partnership, the General
Partner (or, if the dissolution is caused by the death, retirement, insanity,
removal or withdrawal of the General Partner, then the Person designated as
Liquidating Trustee pursuant to Section 13.05 hereof) promptly shall notify the
Partners of such dissolution.
13.05 Liquidation. Upon the occurrence of an "event causing
dissolution" under Section 13.02, unless an election to continue the business of
the Partnership is made pursuant to Section 13.03, the General Partner or, in
the event the dissolution is caused by an event described in Section 13.02(b) or
13.02(c) with respect to the General Partner, a Person or Persons selected by a
Majority Vote of the Limited Partners, shall be the Liquidating Trustee. The
Liquidating Trustee shall proceed without any unnecessary delay to sell or
otherwise liquidate the Partnership Assets and shall apply and distribute the
proceeds of such sale or liquidation in the following order of priority, unless
otherwise required by mandatory provisions of applicable law:
(a) To pay (or to make provision for the payment of) all
creditors of the Partnership, other than Partners, in the order of
priority provided by law;
(b) To pay, on a pro rata basis, all creditors of the
Partnership that are Partners; and
(c) After the payment (or the provision for payment) of all
debts, liabilities and obligations of the Partnership, to the Partners,
first in accordance with their respective Capital Account balances, as
adjusted pursuant to Articles V and VI for all Partnership operations
up to and including such liquidation, and then in accordance with their
respective Percentage Interests.
The Liquidating Trustee, if other than the General Partner, shall be
entitled to receive such compensation for its services as Liquidating Trustee as
may be approved by a Majority Vote of the Limited Partners. The Liquidating
Trustee shall agree not to resign at any time without sixty
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(60) days' prior written notice and, if other than the General Partner, may be
removed at any time, with or without cause, by written notice of removal
approved by a Majority Vote of the Limited Partners. Upon dissolution, removal
or resignation of the Liquidating Trustee, a successor and substitute
Liquidating Trustee (who shall have and succeed to all rights, powers and duties
of the original Liquidating Trustee) shall be selected within ninety (90) days
thereafter by a Majority Vote of the Limited Partners. The right to appoint a
successor or substitute Liquidating Trustee in the manner provided herein shall
be recurring and continuing for so long as the functions and services of the
Liquidating Trustee are authorized to continue under the provisions hereof, and
every reference herein to the Liquidating Trustee will be deemed to refer also
to any such successor or substitute Liquidating Trustee appointed in the manner
herein provided. Except as expressly provided in this Article XIII, the
Liquidating Trustee appointed in the manner provided herein shall have and may
exercise, without further authorization or consent of any of the parties hereto,
all of the powers conferred upon the General Partner under the terms of this
Agreement (but subject to all of the applicable limitations, contractual and
otherwise, upon the exercise of such powers) to the extent necessary or
desirable in the good faith judgment of the Liquidating Trustee to carry out the
duties and functions of the Liquidating Trustee hereunder (including the
establishment of reserves for liabilities that are contingent or uncertain in
amount) for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidating Trustee to complete the winding up
and liquidation of the Partnership as provided for herein. In the event that no
Person is selected to be the Liquidating Trustee within the time periods set
forth above, any Partner may make application to the Court of Chancery of the
State of Delaware to wind up the affairs of the Partnership and, if deemed
appropriate, to appoint a Liquidating Trustee.
13.06 Reasonable Time for Winding Up. A reasonable time shall be
allowed for the orderly winding up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.05 in order
to minimize any losses otherwise attendant upon such a winding up.
13.07 Termination of Partnership. Except as otherwise provided in this
Agreement, the Partnership shall terminate when (a) all of the Partnership
Assets shall have been converted into cash, (b) the net proceeds therefrom, as
well as any other liquid assets of the Partnership, after payment of or due
provision for all debts, liabilities and obligations of the Partnership, shall
have been distributed to the Partners as provided for in Section 13.05(c), and
(c) the Certificate of Limited Partnership shall have been canceled in the
manner required by the Delaware Act.
ARTICLE XIV
AMENDMENTS; MEETINGS; RECORD DATE
14.01 Amendments to be Adopted Solely by the General Partner. The
General Partner (pursuant to the General Partner's powers of attorney from the
Limited Partners described in Article XV), without the consent or approval at
the time of any Limited Partner (each Limited Partner, by acquiring a Unit,
being deemed to consent to any such amendment), may amend any provision of this
Agreement or the Certificate of Limited Partnership in any way that does not
affect the Limited Partners' fundamental interests in the Partnership, and
execute, swear to,
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acknowledge, deliver, file and record all documents required or desirable in
connection with any such amendment, which may include, but are not limited to:
(a) a change in the name of the Partnership or the location of
the principal place of business of the Partnership;
(b) the admission, substitution, termination or withdrawal of
any Partner in accordance with this Agreement;
(c) a change that is necessary to qualify the Partnership, as
a limited partnership or a partnership in which the Limited Partners
have limited liability, under the laws of any state;
(d) a change that is necessary or advisable in the opinion of
the General Partner to ensure that the Partnership will not be treated
as an association taxable as a corporation for federal income tax
purposes;
(e) a change that is (i) of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect; (ii)
necessary or desirable to cure any ambiguity, to correct or supplement
any provision herein that would be inconsistent with law or with any
other provision herein, or to make any other provision with respect to
matters or questions arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement; (iii)
necessary or desirable to satisfy any requirements, conditions or
guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or contained in any federal
or state statute; or (iv) required or specifically contemplated by this
Agreement;
(f) a change in any provision of this Agreement relating to
the allocations provided for in Article VI hereof, including capital
account allocations, allocations with respect to transferred Units,
allocations of profits and losses and allocations under Section 704(c)
of the Code, if, in the opinion of counsel to the Partnership, any of
such allocations are unlikely to be respected for federal income tax
purposes, or if, in the opinion of counsel to the Partnership, any such
changes are required to comply with any changes in the Code or any
other developments in applicable law. In making any such amendment, the
General Partner shall use its best efforts to effect as little change
in the economic and tax arrangements among the Partners as it shall
determine in its sole discretion to be necessary to provide for
allocations which it believes will be respected for federal income tax
purposes or to conform such provisions to changes in applicable law.
Any amendments made by the General Partner pursuant to this Section
14.01(f) shall be deemed to be made pursuant to the fiduciary
obligations of the General Partner to the Partnership and the Limited
Partners, and no such amendment shall give rise to any claim or cause
of action by any Limited Partner; and
(g) a change in any provision of this Agreement which requires
any action to be taken by or on behalf of the General Partner or the
Partnership pursuant to the requirements of applicable Delaware law if
the provisions of applicable Delaware law are
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amended, modified, or revoked so that the taking of such action is no
longer required. The authority set forth in this Section 14.01(g) shall
specifically include the authority to make such amendments to this
Agreement and to the Certificate of Limited Partnership as the General
Partner deems necessary or desirable in the event the Delaware Act is
amended to eliminate or change any provision now in effect.
14.02 Amendment Procedures. Except as specifically provided in Sections
14.01 and 14.03, all amendments of this Agreement shall be made solely in
accordance with the following procedures:
(a) Any amendments of this Agreement must be proposed either:
(i) by the General Partner; or
(ii) by Limited Partners owning at least twenty-five
percent (25%) of the total Units, by submitting their proposed
amendment in writing to the General Partner. The General
Partner shall, within sixty (60) days after the receipt of any
such proposed amendment, or as soon thereafter as is
reasonably practicable, submit the text of the proposed
amendment to all Limited Partners. The General Partner may
include in such submission its recommendation as to the
proposed amendment.
(b) If an amendment is proposed pursuant to this Section
14.02, the General Partner shall seek the written consent of the
Limited Partners to such amendment or shall call a meeting of the
Limited Partners to consider and vote on the proposed amendment. A
proposed amendment shall be effective only if approved by the General
Partner in writing and by a Majority Vote of the Limited Partners,
unless a greater or different percentage vote of the Limited Partners
is required by law or any other provision of this Agreement; provided
that if an amendment is proposed by the Limited Partners pursuant to
subsection (a)(ii) of this Section 14.02 and such proposed amendment is
not recommended or approved by the General Partner, such proposed
amendment will become effective upon a Super-Majority Vote of the
Limited Partners, unless a different percentage is required by this
Agreement or by law. The General Partner shall notify all Partners upon
final adoption or rejection of any proposed amendment.
14.03 Special Amendment Requirements. Notwithstanding the provisions of
Sections 14.01 and 14.02, (i) no amendment to this Agreement shall be permitted
without a Super-Majority Vote of the Limited Partners if such amendment would,
in the Opinion of Counsel, more likely than not cause the Limited Partners to
lose their limited liability under the Delaware Act, and (ii) no provision of
this Agreement requiring a majority or other specified percentage vote of the
Limited Partners may be amended without obtaining such majority or other
specified percentage vote of the Limited Partners.
14.04 Meetings.
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(a) Meetings of the Limited Partners for any purpose with respect to
which the Limited Partners are entitled to vote may be called by the General
Partner at any time (there being no obligation to hold annual or other periodic
meetings of the Limited Partners) and shall be called by the General Partner
within ten (10) days after receipt of a written request for such a meeting
signed by fifty percent (50%) or more in interest of the Limited Partners. Any
such request shall state the purpose of the proposed meeting and the matters to
be acted upon thereat. Meetings shall be held at the principal office of the
Partnership or at such other place as may be designated by the General Partner.
In addition, the General Partner may, but shall not be obligated to, submit any
matter upon which the Limited Partners are entitled to act to the Limited
Partners for a vote by written consent without a meeting pursuant to Section
14.10.
(b) A Limited Partner shall be entitled to cast one vote for each Unit
that he owns: (i) at a meeting in person, by written proxy or by a signed
writing directing the manner in which he desires that his vote be cast which
writing must be received by the General Partner prior to such meeting or (ii)
without a meeting as provided in Section 14.11. Every proxy shall be revocable
at the pleasure of the Limited Partner executing it. The laws of the State of
Delaware pertaining to the validity and use of corporate proxies shall govern
the validity and use of proxies given by Limited Partners. Subject to the
provisions of Section 5.04 and the rights of the holders of any securities
issued pursuant thereto, the Limited Partners shall vote as a single class with
respect to all matters voted upon by the Limited Partners.
(c) With respect to any matter upon which the Limited Partners are
requested to vote or to give their consent, for which the required vote for
approval is not otherwise specified in this Agreement, such matter shall be
considered approved upon a Majority Vote of the Limited Partners.
14.05 Notice of Meeting. Notice of meetings called pursuant to Section
14.03 shall be given in writing or by mail or other means of written
communication addressed to each Limited Partner at the address of the Limited
Partner appearing on the books of the Partnership and Transfer Agent, if any. An
affidavit or certificate of mailing of any notice or report in accordance with
the provisions of this Article XIV executed by the General Partner, Transfer
Agent or mailing organization shall constitute conclusive (but not exclusive)
evidence of the giving of notice. If any notice addressed to a Limited Partner
at the address of such Limited Partner appearing on the books of the Partnership
or Transfer Agent is returned to the Partnership by the United States Postal
Service marked to indicate that the United States Postal Service is unable to
deliver such notice, the notice and any subsequent notices or reports shall be
deemed to have been duly given without further mailing if they are available for
the Limited Partner at the principal office of the Partnership for a period of
one year from the date of the giving of the notice to all other Limited
Partners.
14.06 Record Date. For purposes of determining the Limited Partners
entitled to notice or to vote at a meeting of the Limited Partners or to give
consents without a meeting as provided in Section 14.11, the General Partner or
the Liquidating Trustee, if any, may set a Record Date, which Record Date shall
not be less than ten (10) days nor more than sixty (60) days prior to the date
of such meeting or consent.
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14.07 Adjournment. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record Date
need not be fixed if the time and place of such adjourned meeting are announced
at the meeting at which such adjournment is taken, unless such adjournment shall
be for more than thirty (30) days. At the adjourned meeting, the Partnership may
transact any business that would have been permitted to be transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if a
new Record Date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given in accordance with this Article XIV.
14.08 Waiver of Notice; Consent to Meeting; Approval of Minutes. The
transactions of any meeting of Limited Partners, however called and noticed, and
wherever held, shall be as valid as though they had been approved at a meeting
duly held after regular call and notice if a quorum is present either in person
or by proxy, and if, either before or after the meeting, each of the Limited
Partners entitled to vote, not present in person or by proxy, signs a waiver of
notice, or a consent to the holding of the meeting, or an approval of the
minutes thereof. All such waivers, consents and approvals shall be filed with
the Partnership records or made a part of the minutes of such meeting.
Attendance of a Limited Partner at a meeting shall constitute a waiver of notice
of the meeting; provided, however, that no such waiver shall occur when the
Limited Partner objects, at the beginning of the meeting, to the transaction of
any business at such meeting because the meeting is not lawfully called or
convened; and provided further, that attendance at a meeting is not a waiver of
any right to object to the consideration of any matters required to be included
in the notice of the meeting, but not so included, if the objection is expressly
made at the meeting.
14.09 Quorum. Limited Partners of record who are Limited Partners with
respect to more than fifty percent (50%) of the total number of all outstanding
Units held by all Limited Partners of record, whether represented in person or
by proxy, shall constitute a quorum at a meeting of Limited Partners. The
Limited Partners present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment of such meeting
notwithstanding the withdrawal of enough Limited Partners to leave less than a
quorum, if any action taken (other than adjournment) is approved by the
requisite vote of Limited Partners specified in this Agreement. In the absence
of a quorum, any meeting of Limited Partners may be adjourned from time to time
by the affirmative vote of a majority of the Units represented either in person
or by proxy at such meeting, but no other business may be transacted.
14.10 Conduct of Meeting. The General Partner or the Liquidating
Trustee, as the case may be, shall be solely responsible for convening,
conducting and adjourning any meeting of Limited Partners, including without
limitation the determination of Persons entitled to vote at such meeting, the
existence of a quorum for such meeting, the satisfaction of the requirements of
Section 14.03 with respect to such meeting, the conduct of voting at such
meeting, the validity and effect of all proxies represented at such meeting and
the determination of any controversies, votes or challenges arising in
connection with or during such meeting or voting. The General Partner or the
Liquidating Trustee, as the case may be, shall designate a Person to serve as
chairman of any meeting and further shall designate a Person to take the minutes
of any meeting, which Person in either case may be, without limitation, a
Partner or any officer, employee or agent of the General Partner. The General
Partner or the Liquidating Trustee, as the case may be, may
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make all such other regulations, consistent with applicable law and this
Agreement, as it may deem advisable concerning the conduct of any meeting of the
Limited Partners, including regulations in regard to the appointment of proxies
and other evidence of the right to vote.
14.11 Action Without a Meeting. Any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if the General
Partner so agrees in writing, in its sole discretion, and a consent in writing
setting forth the action so taken is signed by Limited Partners owning not less
than the minimum number of Units that would be necessary to authorize or take
such action at a meeting at which all of the Limited Partners were present and
voted. Prompt notice of the taking of action without a meeting shall be given to
the Limited Partners who have not consented thereto in writing. Written consents
to the taking of any action by the Limited Partners shall have no force and
effect unless and until (i) they are deposited with the Partnership in care of
the General Partner and (ii) consents sufficient to take the action proposed are
dated as of a date not more than one hundred eighty (180) days prior to the date
sufficient consents are deposited with the Partnership.
ARTICLE XV
POWER OF ATTORNEY
Each Limited Partner (including any additional or Substituted Limited
Partner), by the execution of this Agreement, and each Person who accepts Units
or any other Partnership Interest, does hereby irrevocably constitute and
appoint the General Partner, any Chairman, President or Vice-President of the
General Partner, and any person or entity which becomes a substituted or
additional General Partner of the Partnership, and each of the foregoing acting
alone, in each case with full power of substitution, his true and lawful agent
and attorney-in-fact, with full power and authority in his name, place and
stead, to make, execute, acknowledge, swear to, deliver, file and record such
documents and instruments as such Person deems necessary or appropriate to carry
out the provisions of this Agreement, including, but not limited to:
(a) all certificates and other instruments (including counterparts of
this Agreement), and any amendment or restatement thereof, which any such Person
deems appropriate to form, qualify or continue the Partnership as a limited
partnership (or a partnership in which the Limited Partners will have limited
liability comparable to that provided by the Delaware Act on the date hereof) in
any jurisdiction in which the Partnership may conduct business or in which such
formation, qualification or continuance is, in the opinion of any such Person,
necessary to protect the limited liability of the Limited Partners;
(b) any other instrument or document which may be required to be filed
by the Partnership under the laws of any state or which any such Person deems it
advisable to file;
(c) all amendments or restatements of this Agreement adopted in
accordance with the terms hereof and all instruments which any such person deems
appropriate to reflect a change or modification of the Partnership in accordance
with the terms of this Agreement; and
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(d) any instrument or document, including amendments or restatements of
this Agreement and the Partnership's Certificate of Limited Partnership, which
may be required or appropriate to (i) effect the continuance of the Partnership,
(ii) effect the admission of an additional or Substituted Limited Partner or an
additional or successor General Partner, (iii) effect the initial or increased
Contribution of any Partner or the issuance of additional Units or other
securities of the Partnership and the determination of the rights, preferences
and privileges of any class of Units or other Partnership Interests pursuant to
Section 5.04; (iv) exercise any powers of the General Partner or the Liquidating
Trustee, as the case may be, (v) carry out the purposes of this Agreement or
(vi) the dissolution and termination of the Partnership (provided such
continuance, admission or dissolution and termination are in accordance with the
terms of this Agreement), or to reflect any reductions in the amount of
contributions of Partners.
The appointment by each Limited Partner of each such person as his
attorney-in-fact shall be deemed to be a power coupled with an interest, in
recognition of the fact that each of the Partners under this Agreement will be
relying upon the power of such Persons to act as contemplated by this Agreement
in any filing and other action by each of them on behalf of the Partnership, and
shall survive the bankruptcy, death, incompetence or dissolution of any Person
hereby giving such power and the transfer or assignment of all or any part of
the Units of such Person; provided, however, that in the event of a transfer by
a Limited Partner of all or any part of his Units, the foregoing Power of
Attorney of the transferor Limited Partner shall survive such transfer only
until such time as the transferee shall have been admitted to the Partnership as
a Substituted Limited Partner and all required documents and instruments shall
have been duly executed, filed and recorded to effect such substitution. Each
Person who accepts one or more Units is deemed to consent to be bound by any
representations made by the General Partner or the Liquidating Trustee or the
authorized officers and attorneys-in-fact thereof, acting in good faith pursuant
to such power of attorney. Each Person who accepts one or more Units is deemed
to consent to and waive any and all defenses that may be available to contest,
negate or disaffirm any action of the General Partner, the Liquidating Trustee
or the authorized officers and attorneys-in-fact thereof, taken in good faith
under such power of attorney. Each Person who accepts one or more Units shall
execute and deliver to the General Partner or the Liquidating Trustee, within 15
days after receipt of the General Partner's or the Liquidating Trustee's request
therefor, such further designations, powers of attorney and other instruments as
the General Partner or the Liquidating Trustee deems necessary to effectuate
this Agreement and the purposes of the Partnership. In the event a Liquidating
Trustee is appointed pursuant to Section 13.05, references to the General
Partner in this Article XV shall be deemed to include references to the
Liquidating Trustee.
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.01 Notices. All notices, demands, requests or other communications
which may be or are required to be given, served or sent by a Partner or the
Partnership pursuant to this Agreement shall be in writing and shall be
personally delivered, mailed by first-class mail, postage prepaid, or sent by
other generally recognized means of written communication, addressed as follows:
(a) If to the Partnership or the General Partner:
151 Merrimac Street
Boston, Massachusetts 02114
(b) If to a Limited Partner:
The last known business, residence or mailing address
of such Limited Partner reflect in the records of the
Partnership or the Transfer Agent.
Each Partner and the Partnership may designate by notice in writing a new
address to which any notice, demand, request or communication may thereafter be
so given, served or sent. Each notice, demand, request or communication which
shall be delivered, mailed or transmitted in the manner described above shall be
deemed sufficiently given, served, sent or received for all purposes at such
time as it is deposited in the mail or delivered to the addressee or at such
time as delivery is refused by the addressee upon presentation.
16.02 Severability. The invalidity of any one or more provisions hereof
or of any other agreement or instrument given pursuant to or in connection with
this Agreement shall not affect the remaining portions of this Agreement or any
such other agreement or instrument or any part thereof, all of which are
inserted conditionally on their being held valid in law; and in the event that
one or more of the provisions contained herein or therein should be invalid, or
should operate to render this Agreement or any such other agreement or
instrument invalid, this Agreement and such other agreements and instruments
shall be construed as if such invalid provisions had not been inserted.
16.03 Survival. It is the express intention and agreement of the
Partners that all covenants, agreements, statements, representations, warranties
and indemnities made in this Agreement shall survive the execution and delivery
of this Agreement.
16.04 Waivers. Neither the waiver by a Partner of a breach of or a
default under any of the provisions of this Agreement, nor the failure of a
Partner, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, remedy or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any such provisions, rights, remedies or
privileges hereunder.
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16.05 Exercise of Rights. No failure or delay on the part of a Partner
or the Partnership in exercising any right, power or privilege hereunder and no
course of dealing between the Partners or between a Partner and the Partnership
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly provided are cumulative and not exclusive of any other
rights or remedies which a Partner or the Partnership would otherwise have at
law or in equity or otherwise.
16.06 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Partners and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
16.07 Limitation on Benefits of this Agreement. It is the explicit
intention of the Partners that no person or entity other than the Partners and
the Partnership is or shall be entitled to bring any action or enforce any
provision of this Agreement against any Partner or the Partnership, and that the
covenants, undertakings and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, the Partners and
the Partnership (or their respective successors and assigns as permitted
hereunder).
16.08 Consent of Limited Partners. By acceptance of a Unit, each
Limited Partner expressly consents and agrees that, whenever in this Agreement
it is specified that an action may be taken upon the affirmative vote of less
than all of the Limited Partners, such action may be so taken upon the
concurrence of less than all of the Limited Partners and each such Limited
Partner shall be bound by the results of such action.
16.09 Waiver of Partition. The Partners hereby waive any right of
partition or any right to take any other action which otherwise might be
available to them for the purpose of severing their relationship with the
Partnership or their interest in the assets held by the Partnership from the
interest of the other Partners.
16.10 Entire Agreement. This Agreement contains the entire agreement
among the Partners with respect to the transactions contemplated herein, and
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein and therein.
16.11 Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural,
as the identity of the person or entity may require, and the singular form of
nouns and verbs shall include the plural and vice versa.
16.12 Headings. Article and Section headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
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16.13 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of Delaware (but not including the
choice of law rules thereof).
16.14 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required; and it
shall not be necessary that the signatures of, or on behalf of, each party, or
that the signatures of all persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove set forth.
GENERAL PARTNER:
CASTLE CREEK PARTNERS GP, INC.
---------------------------------------
By: Richard G. Pond
Its: Chief Financial Officer
ORIGINAL LIMITED PARTNER:
BOSTON CELTICS LIMITED
PARTNERSHIP
By: CELTICS, INC., General Partner
---------------------------------------
By: Richard G. Pond
Its: Chief Financial Officer
LIMITED PARTNERS ADMITTED TO
THE PARTNERSHIP PURSUANT TO
THIS AGREEMENT
By: CASTLE CREEK PARTNERS GP, INC.,
Their Attorney-in-Fact
---------------------------------------
By: Richard G. Pond
Its: Chief Financial Officer
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SCHEDULE A
LIMITED PARTNERS ADMITTED ON THE EFFECTIVE DATE
<TABLE>
<CAPTION>
Name & Address Number of Units
-------------- ---------------
<S> <C>
</TABLE>
54
<PAGE> 1
FOR IMMEDIATE RELEASE
Contact: Richard G. Pond
(617) 854-8086
BOSTON CELTICS LIMITED PARTNERSHIP
CONSUMMATES REORGANIZATION
June 30, 1998. Boston, Massachusetts. Boston Celtics Limited Partnership
(NYSE: BOS) announced that its reorganization into two entities, a public
partnership taxable as a corporation and a private partnership, was completed
effective today. Holders who elected to continue their investment through the
public partnership received, for each unit of Boston Celtics Limited
Partnership held on June 29, 1998, a cash distribution of $1 and $20 principal
amount of new subordinated debentures issued by the existing partnership. In
addition, each of their outstanding partnership units was converted
automatically into one unit in the new public partnership. The new public
partnership will be known as "Boston Celtics Limited Partnership" and will
commence trading on the New York Stock Exchange on July 1, 1998 under the
symbol "BOS" the same symbol as the existing public partnership before the
reorganization. The existing partnership became a subsidiary of the new public
partnership and changed its name to "Boston Celtics Limited Partnership II".
The subordinated debentures will commence trading on the New York Stock
Exchange on July 1, 1998 under the symbol "BOS-38." Holders of
approximately __% of the outstanding Boston Celtics Limited Partnership units
elected to continue their investment in the public partnership.
Holders of approximately __% of the outstanding Boston Celtics Limited
Partnership units elected to continue their investment in the private
partnership and received one unit of Castle Creek Partners, L.P. for each 100
Boston Celtics Limited Partnership units held on June 29, 1998. The Castle
Creek units will not trade on any market and will be subject to significant
transfer restrictions.
As part of the reorganization, both the new public partnership, Boston
Celtics Limited Partnership, and the new private partnership, Castle Creek,
along with several other Celtics-related entities, have entered into an
agreement with the National Basketball Association. This agreement continues
application to the reorganized entities of the NBA rules, which, as in the
<PAGE> 2
past,among other things, require NBA approval of significant ownership changes
of the partnerships.
2
